Texas A&M saw its NIL collective go up in smoke this week following significant concern over its nonprofit status.
According to CBS Sports, the IRS appeared to be knocking on the door in College Station. Shehan Jeyarajah of CBS Sports wrote that the collective, which A&M dubbed ‘The 12th Man+ Fund’, was brought down over issues with the government agency and its nonprofit status. “The decision to shut down the NIL fund came after the IRS released a memo on June 9, which told NIL collectives their function doesn’t fit within the confines of tax-exempt status. The 12th Man+ Fund attempted to reward donors with athletic department points and tax benefits in exchange for donations to provide NIL compensation to athletes.”
IRS concerns with NIL collectives appeared to be on the horizon after the government agency recently expressed concerns. Collectives have considered themselves nonprofits, and while listing themselves as that isn’t necessarily an issue, it’s what they do after that becomes the problem. Given that being a nonprofit means that you are tax-exempt, the flagrant circumvention is what’s chief here. And not in a great way.
CBS Sports indicated that the fund and A&M will now attempt to re-route to approved destinations for donations.
The college football world reacted to the Texas A&M News. Naturally, answers came around from the entire spectrum.
About Chris Novak
Chris Novak has been talking and writing about sports ever since he can remember. Previously, Novak wrote for and managed sites in the SB Nation network for nearly a decade from 2013-2022