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FMR

NCAA TAX EXEMPT?

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FMR    0

While you are watching the games this weekend, I thought you might be interested in a little reading. This is for everyone who:1. Wants a new Stadium2. Loves College athletics3. Wants to further their knowledge of the NCAAThe US House of Representatives has been looking into tax exemptions for the past few years. The copy provided is the original letter sent to the NCAA and the NCAA's response to that letter.What is at stake here is if the NCAA loses it's tax exemption, there will be big changes in college athletics. Donors already receive tax credits for donations, while the NCAA pays no taxes on the MARCH MADNESS that is going on. That's right, the $6 Billion dollar contract is tax free to the NCAA. But what if they lose that status...Read for yourself how the NCAA defends its position. And remember while you are reading it, they paid Big Bucks for the Attorneys who wrote their position for them, Tax Free!http://www2.ncaa.org/portal/media_and_even...aysandmeans.pdf

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ZipAlumn    0
While you are watching the games this weekend, I thought you might be interested in a little reading. This is for everyone who:1. Wants a new Stadium2. Loves College athletics3. Wants to further their knowledge of the NCAAThe US House of Representatives has been looking into tax exemptions for the past few years. The copy provided is the original letter sent to the NCAA and the NCAA's response to that letter.What is at stake here is if the NCAA loses it's tax exemption, there will be big changes in college athletics. Donors already receive tax credits for donations, while the NCAA pays no taxes on the MARCH MADNESS that is going on. That's right, the $6 Billion dollar contract is tax free to the NCAA. But what if they lose that status...Read for yourself how the NCAA defends its position. And remember while you are reading it, they paid Big Bucks for the Attorneys who wrote their position for them, Tax Free!http://www2.ncaa.org/portal/media_and_even...aysandmeans.pdf
SIXTY SIX PAGES ........ A Vice President of a national company once told me that if I couldn't get my idea across in a one page letter, he didn't have time for my bullshit. And the letter I wrote him was only two pages long.

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GP1    105

Interesting read. Reading this makes me wonder if the NCAA Commissioner, or whatever he is called, realizes what is going on around him.The nut paragraph as it relates to the new stadium is on page 8. "Athletic facilities, state-of-the-art or otherwise, are necesary for the support of the activities for which there is a tax exemption. These facilities, often paid for through bonds and charitable contributions, also generate revenue that offsets the operational cost of athletics that might otherwise be provided through institutional funds."Here is my question based upon that answer. If contributions are no longer tax exempt, are the facilities no longer considered necessary? I'm not certain exactly what the writer is trying to answer with the answer.There is another answer I find interesting and I can't remember the page, but the quote is along the lines that the NCAA does not have the ability to influence spending on the part of schools. This is a complete load of crap. When football seasons are extended from 11-12 games, it is necessary to increase spending. When schools see the amount of money CBS is willing to pay for the basketball tournament, they have to think if they spend more money to get into the tournament, then they will make more money. Putting attendance limits on schools forces schools to spend money just trying to meet the minimum standard. Placing grade and graduation standards forces schools to spend money in these areas so they can comply with NCAA standards. The notion that the NCAA does not influence spending is just nonsense. The NCAA home office is the very institution driving costs up.Another quote was "There is no crisis in financing" as it relates to money spent on athletics. This answer shows the focus the NCAA has on the big school programs and how blind they are to the mid major programs. What he should have said was, "There is no crisis in financing as long as the tax payers do not figure out they are picking up the tab for small conference schools." In the end, Akron will get a stadium and nobody will really care about how it is financed. It has too much momentum to stop now. By the time those idiots in Washington move on something like this (which I don't think they will), the stadium will be complete.Here is another idea. Organizations are made tax exempt as they serve a public purpose. Title IX was passed into law because people felt it served a public purpose. If college athletics are no longer tax exempt because they don't serve a public purpose, does that mean that Title IX no longer serves a public purpose and schools can just have basketball and football teams? I would like to hear the congressman stumble over his words trying to answer that one.

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zip37    0

Typical political crap-- they want everyone else to pay taxes/obey the law execpt themselves.

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Balsy    436
14 hours ago, zippy5 said:

He generates a ton of money for that school. Can't really argue much with it

 

Sure you can.  :puke:

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skip-zip    690
14 hours ago, zippy5 said:

He generates a ton of money for that school. Can't really argue much with it

 

I'll never argue his value as an employee, because of what he generates.  In the business world, he's probably a fantastic bargain.  

 

What makes me sick, and always will, is that someone is making this much money working in intercollegiate athletics at a public University.  He's surely become the John Wooden of college football.  But what  has happened over the last 40 years to escalate this money machine to this level is pretty disheartening to me.

 

I'd be happy to return to the days where Harvard, Yale, Army and Navy were the college football powers.  That was real COLLEGE football.     

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kreed5120    591

I'd find this appalling if it wasn't for the fact Alabamas football progrum prints money. The football program generates enough money for them that not only do they generate enough money to afford his salary, they generate enough money to cover all their non revenue sports.

 

As long as 100k people are willing to pay $60+ per home game, not including food and parking, and millions of people are willing to watch on TV every week, I see this as a bargain. What I find concerning is the universities that pay coaches bloated salaries even though they have to use large student fees to fund them.

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Balsy    436
2 hours ago, zippy5 said:

Go for it then ;)

 

Its more the system than the person.  The fact that the NCAA gets away with being a 501 C 3 organization is insulting.  The NFL willing gave up the status because even it knew it was an absurd joke, both legally but also in public perception.   If you've got people making $11-million in a contract year as part of a "non-profit" organization, that's nefarious at best.  For a "non-profit" organization, it certainly makes a lot of expendable non-profit.  There are plenty of non-profits out there that pay hefty salaries so people in them, so I'm not by any-means claiming the NCAA is the only one...but c'mon now let's cut the crap.  CLEARLY the NCAA is not a non-profit.

It's a house of cards.  If only the programs that could sustain themselves off generated revenue existed, there's no way in hell Nick Saban is making $11-million a year, there'd be barely any programs with which to compete.  This whole system is artificially inflated by the fact of pretending to be non-profit, while having hundreds of members who wouldn't be able to sustain themselves without subsidy.  

 

:puke::puke::puke::puke::puke:

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zippy5    639
32 minutes ago, Balsy said:

 

Its more the system than the person.  The fact that the NCAA gets away with being a 501 C 3 organization is insulting.  The NFL willing gave up the status because even it knew it was an absurd joke, both legally but also in public perception.   If you've got people making $11-million in a contract year as part of a "non-profit" organization, that's nefarious at best.  For a "non-profit" organization, it certainly makes a lot of expendable non-profit.  There are plenty of non-profits out there that pay hefty salaries so people in them, so I'm not by any-means claiming the NCAA is the only one...but c'mon now let's cut the crap.  CLEARLY the NCAA is not a non-profit.

It's a house of cards.  If only the programs that could sustain themselves off generated revenue existed, there's no way in hell Nick Saban is making $11-million a year, there'd be barely any programs with which to compete.  This whole system is artificially inflated by the fact of pretending to be non-profit, while having hundreds of members who wouldn't be able to sustain themselves without subsidy.  

 

:puke::puke::puke::puke::puke:

Sounds like your issue is with the IRS.

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kreed5120    591

The NCAA wets its beak off the NCAA tournament.where it generates 80-90% of its revenue. The P5 cartel runs FBS and the NCAA has little to no impact on what Bama or any other team for that matter decides to pay its head coach. In fact, the NCAA biggest fear is that the top 40 or so teams, the ones that are capable of running without huge subsidies and rise the tide for all the other schools, elect to leave the NCAA and form their own league. 

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Balsy    436

Fine amend my comments to any of the conferences and partners etcetera, that claim 501c3 status on a commodity that is clearly for profit.  My point about Bama paying $11-million still stands.  If you didn't have all the institutions hiding behind tax-exempt non-profit 501c3 status, and they were forced to operate off actual income and not subsidy, the 

 

But Zippy5 your right.  My issue is as much with the IRS than anything.  Who writes the tax-code the IRS must follow?  (rhetorical) Gee, I wonder who has considerable amount of "non-profit" to use to lobby/hire lawyers for the purposes of maintaining said non-profit status?

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kreed5120    591

The NCAA can't restrict pay. You're probably too young to remember this, but they tried in the 90s and got hit with a hefty antitrust lawsuit. Akron or insert whatever university paying their coach 500k-$1M when they realistically should only be paying them ~$100k has nothing to do with Saban making $11 million. He makes it because he brings large amounts of revenue to the university. Alabama would cut other sports, which profits from football funds, if it had to just to keep their cash cow.

 

http://www.cbsnews.com/news/ncaa-to-pay-coaches-545m/

 

In regards to the IRS it's tricky. There are currently ~20 that reportedly earn "profits". Realistically there are probably 40-50 that are capable of running a for profit athletic program. There are 351 D1 schools. That means 85+% of D1 athletic schools in the NCAA are truly non-profits.

 

Edit: If anything his salary is inflated because Bama is paying semi-pro athletes ~25k/year when those athletes would be worth way more on the open market in a for profit league that didn't restrict pay to only room and board + COA.

Edited by kreed5120

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zippy5    639
3 hours ago, Balsy said:

Fine amend my comments to any of the conferences and partners etcetera, that claim 501c3 status on a commodity that is clearly for profit.  My point about Bama paying $11-million still stands.  If you didn't have all the institutions hiding behind tax-exempt non-profit 501c3 status, and they were forced to operate off actual income and not subsidy, the 

 

But Zippy5 your right.  My issue is as much with the IRS than anything.  Who writes the tax-code the IRS must follow?  (rhetorical) Gee, I wonder who has considerable amount of "non-profit" to use to lobby/hire lawyers for the purposes of maintaining said non-profit status?

Non profits don't have to lose money. I think the problem is a lot of people don't know what a non profit is. The NCAAs most recently filed 990 shows 7.7 mil net income. 9 mil was investment income from their assets. Their programs therefore lost 1.3 million bucks. A 501c3 needs to have a charitable purpose, and I think an organization that helps thousands get through college at a reduced price or free would probably fit the bill.

 

Furthermore institutions don't "hide behind non profit status." Public schools are government. They aren't even non-profits

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Balsy    436
12 hours ago, zippy5 said:

Non profits don't have to lose money. I think the problem is a lot of people don't know what a non profit is. The NCAAs most recently filed 990 shows 7.7 mil net income. 9 mil was investment income from their assets. Their programs therefore lost 1.3 million bucks. A 501c3 needs to have a charitable purpose, and I think an organization that helps thousands get through college at a reduced price or free would probably fit the bill.

 

Furthermore institutions don't "hide behind non profit status." Public schools are government. They aren't even non-profits

 

Certainly learning a little here and I appreciate it guys.  But I'm not complete ignorant of 501c3s, and previously worked for one in Columbus.  I'm contending that that the NCAA claiming charitable purpose is nonsense.   That's why the NFL abandoned it's 501c3 status.  Was it's work really charitable?  Does the NFL do charity?  Sure.  That's not the purpose of it's existence though.  But 501c3 isn't just limited to charity; it can include religious, public safety, educational, literary, fostering national and international amateur sports competition, and prevention of cruelty to animals or children.  The organization I worked for in Columbus was under Public Safety and Education and Charity.

 

IMHO, the amateur sports competition is abused and probably needs to be amended.  Because was the original intent to then lead to the system we have today?  I don't think so.  

 

But perhaps it's more a problem with the culture surrounding it.

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K92    1,101

100 people surveyed, top 3 answers on the board.  Most uttered response people have after reading this thread. . .

 

Rings in. . .

 

Just kill me.

 

Survey says. . .

 

Number one answer!  Pass or play?

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skip-zip    690
6 hours ago, Balsy said:

But 501c3 isn't just limited to charity; it can include religious, public safety, educational, literary, fostering national and international amateur sports competition, and prevention of cruelty to animals or children.

 

Let me clarify this even further for you.  The 501C organizations are non-profits.  The 501C3 subcategory is for charitable organizations, like some that you list here.    

 

There's other categories that cover Labor Unions, Trade Organizations, etc.    They are non-profits and don't pay federal income taxes, but they are not charities.  

You may want to check about the NFL.  Aren't they a 501C6 ?

 

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Balsy    436
1 hour ago, skip-zip said:

 

Let me clarify this even further for you.  The 501C organizations are non-profits.  The 501C3 subcategory is for charitable organizations, like some that you list here.    

 

There's other categories that cover Labor Unions, Trade Organizations, etc.    They are non-profits and don't pay federal income taxes, but they are not charities.  

You may want to check about the NFL.  Aren't they a 501C6 ?

 

Perfect, I will thanks.  But that still leaves on the table: Is College athletics really not for profit, or really all about supporting students.  Because, correct me if I'm wrong, the intent of giving tax-exempt status to an organization, is because they are providing a public service or performing civic duty to a cause or group that might otherwise not be served.  Unions serve their members.  Churches do numerous things within their respective communities and are abided by the members, etc...etc.  I know what the NCAA and other college-athletics organizations say they are and do...but do they actually in reality?  

 

The NCAA says it's there to grow and protect the student athlete and for them to achieve a college education, but in reality makes it almost impossible for them to transfer without losing years of eligibility (which in turn impacts their ability to achieve a college education without incurring cost...which is one of the arguments they make for themselves), or ruling, quite arbitrarily in many cases, against student athletes without hearings or just cause (IMHO) basically ruling them ineligible.  Are they really protecting students?  Or are they protecting the system that makes billions for others, tax-free.

 

I don't know, I just feel it's a real slippery slope.  If most college athletic institutions had to operate on a non tax-free basis, they'd abandon college athletics entirely.  Nick Saban isn't being hired, and paid $11-million to improve the educational quality, opportunity or equity of the student-athletes; he's being hired to keep/increase revenue...eh, I mean donations...to the university.  I mean it's frankly inherently absurd.

 

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zippy5    639

Again, Bama isn't a "non-profit." I don't know what makes you think anything would change in their case if they were taxed. Additionally, Bama making money is really the exception to the rule.

 

Knowing your stance on education, I don't think you'd like to see how schools would be run if they were for profit. Bye bye tenure.

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skip-zip    690
36 minutes ago, zippy5 said:

Again, Bama isn't a "non-profit."

 

Yes, Public education Institutions ARE non-profits.   If they weren't, they would not be able to solicit donations.

 

Which is also part of what has escalated this problem.  The "big" sports school are getting massive amounts of money donated from private sources.   

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zippy5    639
27 minutes ago, skip-zip said:

 

Yes, Public education Institutions ARE non-profits.   If they weren't, they would not be able to solicit donations.

 

Which is also part of what has escalated this problem.  The "big" sports school are getting massive amounts of money donated from private sources.   

That's false. They are government. Doesn't matter either way. If they were for profit they could create a foundation and solicit all the donations their hearts desire.

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