NIL Groups Feel Tightening IRS Scrutiny on Tax-Exempt Status

College athlete nonprofit name, image, and likeness groups offering tax deductions are starting to feel pressure from the IRS as the agency moves to act on its divisive 2023 guidance.

The IRS has started revoking and not granting the 501(c)(3) status for some of these college-athlete collective groups that aren’t operating for tax-exempt purposes, IRS Commissioner Danny Werfel said during a hearing at the Senate Finance Committee Tuesday.

The agency disrupted the NIL industry last summer after it issued informal guidance that said many organizations created to fund name, image, and likeness deals for college student-athletes won’t be considered tax-exempt. ...