top of page

The Berman Buzz

Three Constants: Football, Money, and the IRS

Football, field

As college football captures the attention of many this week, let's delve into the dynamic landscape of sports, where the convergence of football, money, and the IRS framework unfolds. Recent developments at Texas A&M University highlight the intricate interplay between booster donations, NIL (Name, Image, Likeness) rights, and IRS regulations.


Texas A&M University found itself in a pickle (no pun intended, especially with pickleball) stemming from its sports foundation accepting donations explicitly intended to compensate student-athletes under the new NIL rules. These rules allow student athletes to receive payment for their NIL. However, this initiative clashed directly with IRS guidelines. The IRS conveyed that donations specifically intended to remunerate players would not be considered tax-deductible for the donors—a juncture that demanded swift and strategic action from the university. 


So, what did Texas A&M University do? Faced with a warning from the IRS, the university executed a strategic maneuver akin to an 'end around' play in football. Rather than openly soliciting donations earmarked for individual players, the university pivoted its approach. It urged donors to contribute without specifying any direct association with a particular athlete, signaling, "We still welcome your support and want your money, but refrain from designating it to a specific player. Wink, wink!"


While subtle, this adjustment caused profound change. It allowed A&M Texas University to encourage donors to support the overall program while subtly hinting at the potential for direct benefits to student-athletes. With a shift in language, Texas A&M Texas University cleverly skirted the direct earmarking of funds for players, leaving room for speculation about where the funds would eventually flow. 


This situation at Texas A&M University illustrates the intricate nature of this new era in college sports. With an ever-evolving framework, universities and their sports foundations will encounter challenges while aligning fundraising initiatives and IRS regulations. 


bottom of page