Friday, September 24, 2010
Anti-BCS Group Files IRS Complaint Challenging Tax-Exempt Status of Bowl Games
- Playoff PAC, Press Release
- Above the Law, How to Take Down the BCS? The Same Way We Got Capone: Tax Law
- Associated Press, Tax Status of Bowl Games Challenged
- Bloomberg, College Football Playoff Backer Files Tax Complaint Against Bowls
- Chronicle of Philanthropy, Top Football Bowl Games Accused of Abusing Nonprofit Status
- Forbes, Playoff PAC Files IRS Complaint Against BCS Bowls
- Going Concern, Anti-BCS Group Sics IRS on Bowl Games Over Tax-Exempt Status
https://taxprof.typepad.com/taxprof_blog/2010/09/anti-bcs-group-.html
Comments
Two quick comments:
1. I'm not sure I'd trust the University of Alabama as to how much money it's brought in as a result of its football team. I think there are independent studies of this issue that reach a different conclusion.
2. It's meaningless to talk of a "free market" when universities benefit from state aid and a federal tax exemption. If they want a free market, why not let them pay tax like everyone else?
Posted by: mike livingston | Sep 25, 2010 8:02:37 PM
Well, in defense of the traditional sports programs, a lot of money is funneled by supporters into the universities that have good programs and because of their success. I used to audit a major university in the SEC with a great football program and I have talked to people in the know about the dollars it raises; the university (and the local businesses) benefits tremendously from the money donated by alumni and boosters who are pleased with the teams and from the money spent by the fans. What surprised me is that golf and tennis, the "country club sports," also bring in a lot of alumni donations. But, what I don't support is turning amateur athletes into undeclared pros at the sacrifice of their educations.
Regarding compensation, the University of Alabama has brought in a lot more money as a result of and after paying Nick Saban $4 million a year. The athletic director made his job more secure with that deal. I suspect that some law professors may be envious about this and deem that their services are more valuable, but the marketplace says otherwise.
Posted by: Woody | Sep 24, 2010 6:47:20 PM
I don't think the issue is so much whether the BCS system is good or bad as whether the tax exemption for university sports activities is a good use of public money. The argument is always that the money is plowed back into education. From my perspective, it looks a lot more like it's plowed back into football.
Posted by: mike livingston | Sep 24, 2010 12:40:44 PM
I never have like the BCS system and how it chooses its matchups, especially that of the national championship game, and my view has nothing to do with its tax status.
The BCS bowl series and national championship game were put in simply as a big revenue source for colleges and their conferences, just like the ever growing list of other bowl games that has now gotten so large that it is going to have to include teams with losing records just to fill the slots.
But, student-athletes have to go to classes sometimes, and forcing them to play even more games in a playoff system to generate more bucks for universities isn't reasonable. The group filing the complaint isn't any more noble in that regard.
But, college presidents get judged on how much money they raise rather than how well they serve the college students. One doesn't necessarily correlate with the other. Pity.
I'd prefer to go back to having AP journalists and UPI coaches select their winners and let people argue about it. But, since money is involved, that will never happen.
Posted by: Woody | Sep 24, 2010 7:58:05 AM
Trust me on the Alabama results. Also, as a result of the team's success, the university increased its stadium capacity to 101,000, and every game is sold out. I'd love to see the "independent studies" that reach a different conclusion.
I sense academic envy over salaries in the athletic department.
Posted by: Woody | Sep 26, 2010 8:18:59 AM