IRS Nixes Tax Edge for College-Sports Booster Groups Paying Athletes

The Internal Revenue Service began blocking an increasingly popular method for funneling wealthy boosters’ money to college athletes, declaring that so-called “name, image and likeness” collectives generally can’t be structured as charities. The tax agency’s decision, announced in a 12-page legal memo, will disrupt some collectives’ plans for paying top-tier athletes for their name, image and likeness (NIL). Since the NCAA changed its rules in July 2021 to let college athletes sign endorsement deals, scores of collectives sprung up alongside universities, some claiming charitable status so they can solicit tax-deductible donations from rich supporters to pay athletes.