IRS Warns Many College Athlete NIL Funders Won’t Be Tax-Exempt

Many organizations created to fund name, image, and likeness deals for college student-athletes will not be considered tax-exempt, the IRS said in a memo Friday.

The NCAA adopted an interim name, image, and likeness policy, or NIL, in 2021 allowing for student-athletes and recruits to benefit from use of their NIL without impacting their eligibility.

Following the policy’s adoption, many “NIL collectives” were established independent of the university to facilitate or fund NIL deals for athletes. Some have formed as a nonprofit under state law and requested tax-exempt status, while others have been established through ...