Tax Exemption Denied for NIL Group Paying Athletes for Charity

The IRS denied the tax-exempt status of a name, image, and likeness group—despite its mission to pay college athletes for charitable services—amid a broader crackdown on the groups.

The agency in 2024 started revoking and not granting the 501(c)(3) status for most so-called NIL collectives, which were created to help college athletes profit from their personal images after the National Collegiate Athletic Association changed its policy to allow those deals.

The IRS says the groups aren’t tax exempt because they serve the private interests of student athletes, rather than to further an exempt purpose.

In a Friday final determination ...