IRS throws a chill into collectives paying college athletes while claiming nonprofit status

By JIM VERTUNO
AP Sports Writer

The rapidly expanding landscape of nonprofit collectives paying college athletes to promote charities has been hit with a potentially seismic disruption. A 12-page memo from the Internal Revenue Service released in June determined that in many cases, the nonprofit collectives may not qualify as tax-exempt if their main purpose is paying players instead of supporting charitable works. And if the collectives aren’t tax-exempt, their donations to quarterbacks, point guards and pitchers may not be either. The founder of a collective tied to Ohio State athletics says it may cease operations in coming months.