TAX ATTORNEY SMACKDOWN! NCAA ASKED TO JUSTIFY ITS EXISTENCE.

Myles Brand and the NCAA can go to Gehenna for all I care. I just want to point out that Freaks and Geeks is one of the best shows ever produced by network television, and only one more reason to hate Fox given its idiotic handling of the series’ only season.

Since this is tax related, Orson you should be all over it; UF has the second best tax law program in the country.

“Like gravy on Fulmer.” ROTFLMAO Lethunya! And, as a matter of fact, I did grab the large latte from Caribou and volume one of the Code before sitting down to write that this morning.

I blame it all on the Fighting Sioux.

I’m sure this is the standard read at all the games, but one of my most unhappy football moments (Terry Bowden notwithstanding) was always hearing venerable Carl Stephens bellow out at each game that “The NCAA is the umbrella organization” blah blah blah.

Sounded like money laundering to me.

Makes you feel dirty if you think about it too long.

AUAlum,

We prefer to say it’s “one of the top two Tax Law Programs in the country”

That way people might mistake it for #1

Well I might end up going there for a LLM; so I’ll call it that as well.

This just in. In order to boost scoring and ratings the SEC will start EVERY series at the opponent’s 25.

Freaks and Geeks was an awesome show. Bill Haverchuck is one of the most under rated characters from a tv show that only lasted one season ever. It aired on NBC not fox, but yes this show should have atleast gotten to year three befor being canned. Cast members still pop up in all kinds of different things. Oh yeah, Myles Brand he kinda sucks WOOO!

Hmmm, Ways and Means and the IRS interested in the NCAA. I wonder who/what triggered this. This isn’t a random callup, somebody’s got a hardon for the NCAA. I may actually have to Tivo congressional hearings for this.

UF has one of the two best LLM Tax programs in the country – and anybody with sense would rather go to Gainesville than New York.

(Now if I could convince anyone that Alabama has one of the ten best Master of Tax (Accounting) programs).

@#*% Awesome!

Get the popcorn, I’m glued to CSPAN for this.

Well the fallout is potentially catastrophic – for the NCAA, that is. If you lose your status, and it’s deemed that you were working for-profit you can be liable for tax retroactively.

It’s an interesting situation – but as Joe said back in August about the 12 game schedule….

“I really take exception to what the NCAA Commissioner said, Myles Brand, ‘No difference a week off than a week when there is school.’ He doesn’t know what he is talking about. When we had a week off, you could always kind of gear in some things and make sure your kids got a little rest and take a couple of days off so they can get caught up with term papers and do different things. We don’t have that now. If you go 12 games for 12 weeks in a row, that is not going to be easy. I would prefer, obviously, that we had an open date. I would prefer we play in 10 games as long as you get this BCS and everything going on. I think 12 games is tough, tough, tough for kids, but it is (about) money.”

This is awfully high-minded thought for this crowd. I didn’t think we were capable of rising above the fussin’ and the feudin’. EDSBS….I salute you!

As for the topic at hand, I tend to doubt anything will come from this. It’s a political battle that really isn’t worth fighting.

Oh, but it is NoleinTexas, it is.

I don’t see it. Say some congressman wants to press the issue (and I don’t think it’s a battle he/she could win). The NCAA PR machine will crank up and say that if you tax us, you have to tax the athletic departments….and if you tax the athletic departments, goodbye Godzillatron.

No politico in his right mind is going to take THAT away.

Um, isn’t Ways and Means the very definition of an organisation that’s unpopular and vaguely purposed? Even given how unlikeable the NCAA is, I can’t see Congress beating anyone in a PR battle. Indeed, I shudder to think how loathsome and despised an insitution would have to be to be lose in the court of public opinion to Congress – perhaps MLB? [Theatrical shudder]

I would have to concur with the notion that nothing will come of this since (whoo! blog post related to work):

-the NCAA funnels most of the money it takes in (after Miles’ 800k) to the schools
-each NCAA school earns it’s tax exempt status independently of all others
-most schools run a loss or close to break-even on athletic activities (even some BCS conference teams)

The IRS would be hard pressed (and not likely) to make the case that schools (Ohio State, Texas, Florida, etc) are are subject to UBIT (which it would have to prove on an individual basis). Even if it did, I think (tax accountant, not tax lawyer) it could be contested in court, and tax cases like all others (if filed in District Court), can be heard in front of a jury.

So do you think the jurors in the Ohio Southern District Court (in Columbus) are going to find Ohio State has to pay taxes on football profits???

There seems to be a failure to distinguish between the athletic programs and the NCAA itself. Only the NCAA would be in trouble of having its exemption revoked because it is not specifically tied to an educational university. Dvision 1 football programs will likely never lose exemptions or be subject to the UBIT tax. It can clearly be shown that such income is reinvested in the oringal exempt purpose. And, I went to UW for an LLM which is one of the top 3, but will never be mistaken for number 1.

Every Day Should Be Tax Law LLM Program Evaluation Day.

Could Myles Brand go to jail over this?

We’re missing the big picture.

Why can’t we all be tax exempt?

I’m sure that it would still be interesting to flip through the NCAA’s finances.

It’s all a racket – everything is – think they can blame Abramoff for this? or maybe Martha Stewart…

PSUgirl, I don’t know about Abramhoff or Martha Stewart, but I bet right now you could find a trail to Foley and Hastert in the NCAA’s books.

I would talk some smack about this weekends matchup, but Mason can’t even beat JoePa in a 70 yard dash, so why should anyone expect him to outcoach him?

The IRS would be hard pressed (and not likely) to make the case that schools (Ohio State, Texas, Florida, etc) are are subject to UBIT (which it would have to prove on an individual basis). Even if it did, I think (tax accountant, not tax lawyer) it could be contested in court, and tax cases like all others (if filed in District Court), can be heard in front of a jury.

So do you think the jurors in the Ohio Southern District Court (in Columbus) are going to find Ohio State has to pay taxes on football profits???

Comment by Crazy Joe — October 5, 2006 @ 3:53 pm

One wrinkle: To get to Federal district court, you have to pay the tax assessment and sue for a refund. That works well for corporate taxpayers, but state universities may have a hard time fronting that much cash. To contest the assessment in the first place, you must file in the Tax Court in Washington.

If the IRS tries to revoke exemption altogether, only the Tax Court has jurisdiction. (See Section 7428.)

likes to idle away slow afternoons by firing lightning bolts from his fingers at hapless interns I thought Congress reserved that kind of thing for teenage pages.

Zing!

So, the kids are calling it “firing lightning bolts” these days, huh?

Wow! That’s why tax attorneys get the big bucks. Good call DevilGrad.

At the risk of this going political, I’ll put this out there: anybody stop to ask why this government is looking for tax dollars out the NCAA? Somehow I don’t think this was started by the good Representative Thomas’ random interest in the relative merits of the NCAA’s tax status.

Man, I just love it here. First-time caller. I’ll hang up and listen.

You know, one of the reasons I come to this site is to IGNORE my Income Tax class, which is taught by a member of the UF LLM Faculty (I’m just a JD candidate though).

Well done, causing my fun to overlap with my work =*(

Another kudo on the Freaks & Geeks reference.

“I know what high people look like. I went to a Seals & Crofts concert last summer.”

It’s easy to look at this on only one side of the coin. The NCAA certainly takes in a lot of revenue from its CBS contract, but most of that money goes back to the member institutions. For example, the NCAA sponsors 88 championships for 23 sports. Most of those bring in far less revenue than they cost. If the tax-exempt status were to be removed, the student-athletes are the ones who will suffer.

The revenues generated by football and men’s basketball programs help schools like Boston College and Ohio State support 30 varsity sports, including cross country, rowing and fencing. Those programs won’t add revenue to the coffers of an institution, but the student-athletes who play those sports benefit from the athletics experience the same as their classmates who regularly appear on national television.

I’ve shared more thoughts on this on the NCAA blog. Thanks to Orson for submitting his questions for Dr. Brand and we will continue to answer those you submit on EDSBS or the Double-A Zone.

Josh Centor
NCAA

Josh,

Where there’s smoke, there’s (usually) fire. The NCAA (or some of its member institutions) have POed some Congress critter. Why else would Ways and Means be sending a questionaire (and a possible invitation to speak to the committee).

Uh-oh Orson- the NCAA is now following EDSBS. Now you must decide to use your powers for good or for evil.

It’s great to see the NCAA respond, but I think you may have begged the thrust of Chairman Thomas’s questions — which I believe to be whether the entire “student-athlete” construct, as currently implemented, bears any close relationship to NCAA member-instutions’ educational purpose.

You also should note the Chairman’s remark on page two of his letter that “the activity ITSELF” must contribute to the educational purpose (“other than through the production of income).” (Emphasis added.) That’s not just Thomas talking — that’s years of case law, and you’re going to need to do better than talk about the poor rowers and volleyball players when you prep Dr. Brand for his response.

Am I the only one just a little amused that a blog that features a picture of monkies throwing poo at a computer is now on the NCAA PR radar? It’s only a matter of time before Orson starts paying interns $500 a week to not work and gets busted for lack of institutional control.

Freaks and Geeks quotes from IMDB: Almost as good as watching the show itself:

http://www.imdb.com/title/tt0193676/quotes

Don’t know if this has been posted yet, and I know the Fulmer Cup is long since finished, but I thought I’d call this one out—-another football player for Moo U has been arrested, this time for sexual assault. Does that make 8 for the bulldogs? Good lord, I almost expect them to fire Croom and hire The Rock to come in and turn them around…all while helping them regain self confidence and know that they can contribute to society once they’re released from prison. I mean Starkville.

http://www.clarionledger.com/apps/pbcs.dll/article?AID=/20061005/NEWS/61005012

Now Orson’s gonna go all Don Simpson on us. What will TCOAN think?

anyone interested in the nuts and bolts of this should keep an eye on the sage pronoucements of the good folks over at the sports economist who are on the case. a good place to start doing more detailed research is the taxonomy of legal blogs section on tax law blogs.

Here is a pretty good introduction to UBIT, including a tidbit I didn’t know — that the IRS litigated and lost a case in 1990 over whether advertising revenues from the NCAA tourney were taxable as unrelated business income. The Tenth Circuit held for the NCAA on the very shaky grounds that, because the tourney lasts only a month, selling ads isn’t “regular” business activity. The IRS has never acquiesced in the decision. (An IRS acquiescence means that the IRS agrees not to pursue the same legal theory in a different case.)

MT will play against LSU http://florida.scout.com/2/576244.html

Kudos to DevilGrad for proper use of “begging the question”. So rare.

Wonder why the Senate Finance Committee isn’t the one challenging the NCAA. Figured Sen. Grassley would be the one consistent with his lambasting not-for-profit hospitals and health systems.

As you can probably guess, I work almost exclusively with not-for-profits.

Unrelated to the post, but focusing on the picture used to drive the joke home: the kid on the right is the youngest member of the Friar’s Club. More to the point, I learned by listening to the commentary on Club Dread that he is the world’s formost connoisseur of titty bars.

Anyone else notice Rece Davis just said “It’s hard out here for a coach?”

And Orson’s NCAA-Mandated Homefield Security phone tap begins….NOW

Let me know when he says “Chuck Amato is the man.”

The Chest is doing everything but suck their AD’s cock in order to keep his job.

Amato, “WHat critics, I have no idea what you’re talking about”

Laughable

First off, I saw it correctly in the comments, but the Representative’s name is Bill THOMAS. And he’s retiring, effective in January, so this is just smoke-blowing by him.

But to answer #27, Thomas (and his Senate counterpart Chuck Grassley) have been seriously about reforms of non-profits and charitable organizations in the wake of abuses. The recent change to the UBIT law is part of that, in that it’s worded to try to root out cheaters.

I believe I also read that this was in response to a letter the tax committee and Thomas sent to the NCAA, so this may push on past Thomas’s retirement, despite what I may have implied above.

Apologies in advance for the legal discussion….

As a tax lawyer who knows just enough tax-exempt law to be dangerous, I would have guessed that the NCAA obtained its exemption as an entity that “fosters national or international amateur sports competition.” If that’s the case, it’d be hard to see where the UBIT is. Maybe someone will tell me that “national amateur sports competition” is limited to the USGAs and US Track & Fields of the world, but it’s not like those organizations don’t rake in the cash as well. My gut is that the USA Today guy got it just right — no Congressman is going to get the NCAA’s exemption pulled just by writing a letter, and a law change would never get out of committee.

OW! My brain hurts!

Of course it does, you’re from Ohio State.

Thomas: “So what would you say you do here?”

Brand: “I deal with the goddamn customers so the engineers don’t have to! I have people skills!”