Are You Ready for Some Football?

Madeline had previously posted an interesting query about the economics and tax implications of (gulp) college football.  It’s worth another look in light of this recent post by DevilGrad on a similar issue.  There’s even more analysis here.

The real question at issue is "Why is a multi-million dollar business, which is not effectively related to a charitable purpose, exempt from federal taxation?"

Okay, an argument can be made that football is related to a charitable purpose…  You can claim that the revenue from football (and other college sports) is used to provide an education for its athletes.  Additionally, the NCAA boosts its owns claims to tax-exempt status by claiming that "95 percent of its money is returned to individual athletic programs in the form of payments and services. That helps fund the entire athletic department, including its lower-profile sports."  Athetics is, no question, a huge part of the collegiate experience - even at an all-women’s college with a low profile athletic program like mine.  But what if it becomes bigger than the college itself?

The NCAA is, according to many reports, not worried about the inquiries into its status.  The IRS makes that decision.  And, the IRS Commissioner is not a grad of Notre Dame, Duke, UNC, PSU or other sports power-house.  Mark Everson counts Yale and NYU as his alma maters.  So, relying on sentiment about college sports (allegedly one of the NCAA’s aces in the hole) is not enough…