SCOTUS rules against NCAA | The Boneyard

SCOTUS rules against NCAA

They finally going to start taxing scholarships?

If theyre employees that is taxable income.

you cannot separate the two and claim otherwise
 
the Q said:
They finally going to start taxing scholarships?

If theyre employees that is taxable income.

you cannot separate the two and claim otherwise
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Law is my business, know nada about tax law.

Is a scholarship really taxable? A student does not receive a benefit($$) but rather an expense (tuition, room, board) is waived. If you don't incur the expense you receive no benefit.

Also, is a student an employee under current IRS and NLRB definitions (the PRO Act is not yet law)? If not, the school sends a 1099 to a scholarship student as a independent contractor who files a Schedule C claiming as expenses of being a independent cpntractor/student tuition, room, board, books, etc.
 
huskiesouth said:
Law is my business, know nada about tax law.

Is a scholarship really taxable? A student does not receive a benefit($$) but rather an expense (tuition, room, board) is waived. If you don't incur the expense you receive no benefit.

Also, is a student an employee under current IRS and NLRB definitions (the PRO Act is not yet law)? If not, the school sends a 1099 to a scholarship student as a independent contractor who files a Schedule C claiming as expenses of being a independent cpntractor/student tuition, room, board, books, etc.
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Im not a tax law guy either.

but if your wan employee and given that benefit, I would think that would be taxed.

right now they are not employees
 
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huskiesouth said:
Law is my business, know nada about tax law.

Is a scholarship really taxable? A student does not receive a benefit($$) but rather an expense (tuition, room, board) is waived. If you don't incur the expense you receive no benefit.

Also, is a student an employee under current IRS and NLRB definitions (the PRO Act is not yet law)? If not, the school sends a 1099 to a scholarship student as a independent contractor who files a Schedule C claiming as expenses of being a independent cpntractor/student tuition, room, board, books, etc.
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There are scholarships that are taxable. For instance, the Americorps scholarship (Segal AmeriCorps Education Award) is taxable, you have to declare it as income if you use more than $600 in a given year. To my knowledge, it is the only Federal Scholarship that is taxable, you receive a 1099-Misc for using it.

Id be surprised if the students were now responsible for paying the taxes on that, that’d be insane.
 
Fatroony5 said:
There are scholarships that are taxable. For instance, the Americorps scholarship (Segal AmeriCorps Education Award) is taxable, you have to declare it as income if you use more than $600 in a given year. To my knowledge, it is the only Federal Scholarship that is taxable, you receive a 1099-Misc for using it.

Id be surprised if the students were now responsible for paying the taxes on that, that’d be insane.
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not really

the argument seems to be that they’re employees.

That would seem to make that a pretty obvious decision
 
the Q said:
not really

the argument seems to be that they’re employees.

That would seem to make that a pretty obvious decision
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I was a grad student that was employed by my university as a researcher/teacher's assistant, and got a full scholarship. If I had to pay taxes on my scholarship, I would have made zero income.
 
phillionaire said:
I was a grad student that was employed by my university as a researcher/teacher's assistant, and got a full scholarship. If I had to pay taxes on my scholarship, I would have made zero income.
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it would be the right thing to do.
 
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the Q said:
not really

the argument seems to be that they’re employees.

That would seem to make that a pretty obvious decision
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There’s no way the students are going to be liable to pay taxes on their scholarship, I don’t see how that’s feasible. How are they going to repay thousands of dollars in taxes every year? I’m trying to imagine how a track and field athlete who maybe makes a little off NIL would be able to pay taxes on their scholarship, it’d be a nightmare.
 
This is a dark day for any athlete that has a scholarship in a non-revenue sport. They are screwed. It is going to be a lot more expensive to carry them now than it used to be, and schools will start slashing costs.

I also question what the top academic schools that are D1 will do. Stanford, Northwestern, Duke, Vanderbilt, Georgetown and Rice consider the Ivies and the UAA schools their competition, not NC State or Oregon State. It will be interesting to see how far they are willing to go to compete with other P1 schools, or if they will pull out of the conferences eventually.
 
nelsonmuntz said:
This is a dark day for any athlete that has a scholarship in a non-revenue sport. They are screwed. It is going to be a lot more expensive to carry them now than it used to be, and schools will start slashing costs.

I also question what the top academic schools that are D1 will do. Stanford, Northwestern, Duke, Vanderbilt, Georgetown and Rice consider the Ivies and the UAA schools their competition, not NC State or Oregon State. It will be interesting to see how far they are willing to go to compete with other P1 schools, or if they will pull out of the conferences eventually.
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Schools have largely already been slashing non-revenue sports.
 
nelsonmuntz said:
To those shouting at Q right out of their butthole, you don't need to have an opinion on this. The IRS has already covered it.

Topic no. 421, Scholarships, fellowship grants, and other grants | Internal Revenue Service

Topic no. 421, Scholarships, fellowship grants, and other grants
www.irs.gov www.irs.gov

It looks like any compensation above tuition is going to be taxable.
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Why aren’t room and board, the living stipend and other items “above” tuition not taxed now and how does today’s ruling change the status quo as it relates to those items?
 
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Guapo said:
Why aren’t room and board, the living stipend and other items “above” tuition not taxed now and how does today’s ruling change the status quo as it relates to those items?
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I don't on w for sure but I do know I get up to about $7k in tuition payments before it goes from being a non-taxable benefit and it turns in to taxable income.
 
aburks41 said:
Kavanaugh was the one who wrote the Storrs piece. He was a Yale guy
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Guapo said:
Why aren’t room and board, the living stipend and other items “above” tuition not taxed now and how does today’s ruling change the status quo as it relates to those items?
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So, actually they are taxable (see below).

Again, I ask how does today’s ruling change the status quo when it comes to these items?
 

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"Nowhere else in America can businesses get away with agreeing not to pay their workers a fair market rate on the theory that their product is defined by not paying their workers a fair market rate."

Boom. Mic drop.
 
Guapo said:
So, actually they are taxable (see below).

Again, I ask how does today’s ruling change the status quo when it comes to these items?
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I said this in another thread a few months ago.

We are transitioning from athletes being declared ineligible for illegal benefits to athletes being ineligible for going to jail for tax evasion.

Every university better have a well-staffed tax preparation and assistance dept to keep athletes eligible.
 
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Chin Diesel said:
I said this in another thread a few months ago.

We are transitioning from athletes being declared ineligible for illegal benefits to athletes being ineligible for going to jail for tax evasion.

Every university better have a well-staffed tax preparation and assistance dept to keep athletes eligible.
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With the forthcoming NIL rules, many schools (including UConn - there was an article a few days back) have set up offices to help athletes navigate these waters, or outsourced the help to law firms. I assume tax stuff would be part of that.
 
Guapo said:
With the forthcoming NIL rules, many schools (including UConn - there was an article a few days back) have set up offices to help athletes navigate these waters, or outsourced the help to law firms. I assume tax stuff would be part of that.
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Some will do better than others. And if I were a parent I would make that a big part of my kid's recruiting process.
 
nelsonmuntz said:
This is a dark day for any athlete that has a scholarship in a non-revenue sport. They are screwed. It is going to be a lot more expensive to carry them now than it used to be, and schools will start slashing costs.

I also question what the top academic schools that are D1 will do. Stanford, Northwestern, Duke, Vanderbilt, Georgetown and Rice consider the Ivies and the UAA schools their competition, not NC State or Oregon State. It will be interesting to see how far they are willing to go to compete with other P1 schools, or if they will pull out of the conferences eventually.
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I agree with this but this is what people seem to want. Non-revenue sports and women's sports are on their last legs.
 
nelsonmuntz said:
This is a dark day for any athlete that has a scholarship in a non-revenue sport. They are screwed. It is going to be a lot more expensive to carry them now than it used to be, and schools will start slashing costs.

I also question what the top academic schools that are D1 will do. Stanford, Northwestern, Duke, Vanderbilt, Georgetown and Rice consider the Ivies and the UAA schools their competition, not NC State or Oregon State. It will be interesting to see how far they are willing to go to compete with other P1 schools, or if they will pull out of the conferences eventually.
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I get that it sucks for non-revenue student athletes but they are by and large from socioeconomic classes that don’t have as much of a need. The current model is pretty bad.

“We find that the prevailing model rests on taking the money generated by athletes who are more likely to be Black and come from low-income neighborhoods and transferring it to sports played by athletes who are more likely to be white and from higher-income neighborhoods,” the researchers write in a recent Brookings Institution article.
 
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nelsonmuntz said:
This is a dark day for any athlete that has a scholarship in a non-revenue sport. They are screwed. It is going to be a lot more expensive to carry them now than it used to be, and schools will start slashing costs.
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Eh, at the end of the day, who cares? I'm hoping it's a dark day for the $2M assistant FB coach.
 
nelsonmuntz said:
This is a dark day for any athlete that has a scholarship in a non-revenue sport. They are screwed. It is going to be a lot more expensive to carry them now than it used to be, and schools will start slashing costs.

I also question what the top academic schools that are D1 will do. Stanford, Northwestern, Duke, Vanderbilt, Georgetown and Rice consider the Ivies and the UAA schools their competition, not NC State or Oregon State. It will be interesting to see how far they are willing to go to compete with other P1 schools, or if they will pull out of the conferences eventually.
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The side effects will be super interesting to watch. In the end, I don't think this will be as seismic of a change as people think for the revenue sports. It'll just put much of the payments in the open. But there will be other shifts:
  • I agree about the non-revenue sports. Also, how does Title IX come into play? The ruling is about "limits on the education-related benefits that schools can provide to athletes." Kavanaugh made it clear that it could go beyond that under different facts, but that's dicta. Will that mean that the random women's team that exists to counter the football scholarships will have to get the same benefits? That could make this impact even more expensive. The math will have to result in a team not just being profitable, but profitable enough to pick up any extra costs.
  • Conferences with networks could benefit even more... or struggle more. They will have to encourage or require schools to keep the extraneous sports that fill out their programming. Nobody wants to see some of these sports, but they are necessary. Otherwise you'll wind up with a conference version of ESPN Classic (which I think is video on demand now).
  • As currently decided, I think the superior academic schools will play along. This is still technically tied to education, but it will expand and we'll see who follows. I think this would've been a bigger deal 20 years ago. Remember when Elton Brand decided to leave after one year and the Duke students were going off on him about not really being a Dukie because he wasn't loyal? Emails went viral (Early 2000's version) of him going back at some of the students. Now, most schools have come to grips with the dirty business of their revenue sports. All the ones you mentioned are super rich schools, with super rich alums. I think they'll play ball. They may even play more since they may not have been okay with bagmen dripping cash, but perfectly happy making public payments/benefits.
  • The Transfer Portal will become even crazier. If you are top player at a Mountain West school (but not NBA material), how do you not transfer to a crappy PAC12 school just for the benefits.
 
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