BCS Bowls Accused of Tax Irregularities
Could the IRS end up playing a role in crowning college football's national champion? Probably not, but an IRS investigation could lead to the loss of the bowls' tax-exempt, nonprofit status. A political action committee filed a complaint to the IRS in September about the operations at the Fiesta, Orange and Sugar bowls. Central to that complaint are cruises and parties hosted by these bowls, which call into question the government assistance the bowls receive due to their exempt status.
Nonprofit, tax-exempt status designation allows businesses to avoid paying taxes because they are a community trust. Increasingly, the IRS has put increased focus on compliance and justification of these types of tax breaks. Nonprofits must stay true to their mission, which includes assisting "the cause of higher education with the highest university payouts possible." They can't give out private benefits, donate to friendly political candidates or lobbyists.
The bowls maintain that they are operating within the limits of nonprofit rules and regulations. All the BCS bowls are local economic engines that greatly benefit their cities. But opponents argue the big bowls have gotten too fat and powerful.
If the allegations hold, the bowls could lose their tax-exempt status. However, it's likely that they'd continue to operate without that designation. And college football fans will continue to find fault with the imperfect system for crowning the national champion.
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