IRS getting involved in the NIL?

[95 Vol Alum]

18-19 year-olds have been earning taxable income for a very long time. Why is it an area of concern when it's college athletes doing the earning?

The NIL constructs definitely need to understand where they fall in the IRS' view of their activities, though.

 

[VolTull]

18-19 year-olds have been earning taxable income for a very long time. Why is it an area of concern when it's college athletes doing the earning?

The NIL constructs definitely need to understand where they fall in the IRS' view of their activities, though.

I guess the main reason is that NILs get major press attention.

 

[Extra Point]

IRS getting involved in the NIL?​

Aaahhhhhh, so it all makes sense now. This is why Biden hired 85,000 more IRS agents.

Just for the record that was 6500 IRS agents over 10 years, congress passed too. Btw, if someone gives you $400,000 a year, it’s income, and thus subject to income taxes in the federal system and some states.

 

[AthensVol2007]

I've been advocating for years that personal finance should be a mandatory college course. Too many "educated" people just don't seem to comprehend money management.

The emotional pull of materialism is simply stronger than the mental fortitude it takes to manage money more times than not.

 

[AthensVol2007]

You're assuming the university just hands out millions of dollars to 19 year olds and doesn't have some sort of plan in place to handle taxes? Seems like that would be a huge mistake.

What university is handing out money?

 

[Volador]

Just for the record that was 6500 IRS agents over 10 years, congress passed too. Btw, if someone gives you $400,000 a year, it’s income, and thus subject to income taxes in the federal system and some states.

Aaahhhh, forgot to blue the font!!

 

[SpaceCoastVol]

How on God's green earth could these NIL merchants be non-profit? That's insane.

 

[volfan102455]

Those of you who think most 18 - 20-year-olds understand taxes are kidding yourself. There is also a big difference of an 18-20 year old that works part time or at a job where they generally don't owe money back to the IRS in April verses those that could be making enough NIL to owe a significant amount. They not only have to pay income tax but also have to factor in social security and in some places state income tax.

If the collective or whomever they have the agreement with is taking out the taxes it is easier - but if that is not happening, yes some of these kids will have a wake up call when they file.

And you can bet these collectives will file and send out 1099 that the IRS will see and expect filing from those that received them.

 

[volfan102455]

How on God's green earth could these NIL merchants be non-profit? That's insane.

I don't get it either. Most of these connections do not met the basic criteria.

 

[SayUWantAreVOLution]

Those of you who think most 18 - 20-year-olds understand taxes are kidding yourself. There is also a big difference of an 18-20 year old that works part time or at a job where they generally don't owe money back to the IRS in April verses those that could be making enough NIL to owe a significant amount. They not only have to pay income tax but also have to factor in social security and in some places state income tax.

If the collective or whomever they have the agreement with is taking out the taxes it is easier - but if that is not happening, yes some of these kids will have a wake up call when they file.

And you can bet these collectives will file and send out 1099 that the IRS will see and expect filing from those that received them.

By all means since most college kids can't do taxes, let's never suggest they get a contract 1099 job while going to school. IT'LL RUIN THEIR LIFE!!!! IT'LL BE AWFUL!!!

By all means, young people shouldn't come into money. It's terrible. It's the worst possible thing.

 

[mudhen]

This .The IRS.This is what may bring the NIL stuff back to earth. There are a lot of deep pockets donors who would rather not have the IRS sniffing around, for any number of reasons.

 

[95 Vol Alum]

Those of you who think most 18 - 20-year-olds understand taxes are kidding yourself. There is also a big difference of an 18-20 year old that works part time or at a job where they generally don't owe money back to the IRS in April verses those that could be making enough NIL to owe a significant amount. They not only have to pay income tax but also have to factor in social security and in some places state income tax.

If the collective or whomever they have the agreement with is taking out the taxes it is easier - but if that is not happening, yes some of these kids will have a wake up call when they file.

And you can bet these collectives will file and send out 1099 that the IRS will see and expect filing from those that received them.

I think most 20-80 year olds don’t understand taxes. Everyone who has reportable income has to reconcile their income with tax paid in April.

The smart programs will advise the students on how to manage navigating tax requirements. But human behavior isn’t guaranteed, failure will have consequences. We shouldn’t withhold opportunities to earn money from anyone because they might screw up their taxes. What a slippery slope.

Do folks sit around “worrying” about kid actors, tennis players, race car drivers, entrepreneurs?

 

[volfan102455]

By all means since most college kids can't do taxes, let's never suggest they get a contract 1099 job while going to school. IT'LL RUIN THEIR LIFE!!!! IT'LL BE AWFUL!!!

By all means, young people shouldn't come into money. It's terrible. It's the worst possible thing.

Not saying folks should not strive to earn money - just saying most at that age are not prepared and NIL is throwing money at them and more than likely not preparing them for what comes. And if some of these NIL's are trying to operate as a non-profit, when they clearly aren't one, not sure they should be advising these young folks on anything. There is an above average chance that some of these players end up owing back taxes that will incur interest over time equivalent to what some students will own in student loan debt. Only the IRS is NOT forgiving. If they are making over a certain amount, they should be employing a financial advisor.

I wasn't prepared when I was that age. And I have spent the last few years helping my nieces in this age bracket understand taxes, though they typically learn the reality with that first paycheck.

 

[volfan102455]

Do folks sit around “worrying” about kid actors, tennis players, race car drivers, entrepreneurs?

No, but we all hear about the kids later in life playing the "victim card" suing everyone involved, including their parents, for not helping them manage their money. That will happen here - I could see some players eventually suing these collectives for mismanagement when their NFL dreams don't pan out and they find they have wasted the educational opportunity and have no money and no other plan for their life.

And there also seems to be players out of high school that have potential but are wandering aimlessly from school to school with no opportunity to prove themselves.

 

[Sara Clark]

You're assuming the university just hands out millions of dollars to 19 year olds and doesn't have some sort of plan in place to handle taxes? Seems like that would be a huge mistake.

There are people in place giving them tax advice.

I may be wrong, but I don't think the issues are solely on the players. How much of the NIL funds go to the players? You know it's not 100%.

 

[SayUWantAreVOLution]

Not saying folks should not strive to earn money - just saying most at that age are not prepared and NIL is throwing money at them and more than likely not preparing them for what comes. And if some of these NIL's are trying to operate as a non-profit, when they clearly aren't one, not sure they should be advising these young folks on anything. There is an above average chance that some of these players end up owing back taxes that will incur interest over time equivalent to what some students will own in student loan debt. Only the IRS is NOT forgiving. If they are making over a certain amount, they should be employing a financial advisor.

I wasn't prepared when I was that age. And I have spent the last few years helping my nieces in this age bracket understand taxes, though they typically learn the reality with that first paycheck.

Your argument is petty. You don't like NIL so you're looking for something to paint it bad.

They are earning the money. Some will do great like Hendon Hooker and some will do stupid things with money.

It's not that crucial. They're young. If they don't save a dime and enjoy the ride and no one gets hurt, let it be.

 

[wmcovol]

FICA is about 16% alone. Then with the income taxes on $100,000+ with few dependents or deductions & they’ll be close, if not over 50% owned to the govt. Most won’t have that much money set aside unless they got real good financial advice.

 

[SayUWantAreVOLution]

FICA is about 16% alone. Then with the income taxes on $100,000+ with few dependents or deductions & they’ll be close, if not over 50% owned to the govt. Most won’t have that much money set aside unless they got real good financial advice.

So what is the IRS going to do, drag a bunch of teenagers into court? Jail them over $50k?

They'll get letters. They'll get next year's NIL possibly garnished, at the worst. At the very worst, it's a hard lesson. As NIL has existed a couple of years now and I've not seen a single "OMG!!!! NIL got me in deep crap with the IRS!" story, you guys are just petty.

This is all just sour grapes because NIL exists.

 

[Gandalf]

Good for them. Nothing will turn a mushy headed young socialist into a full throated conservative like the IRS sending them a letter saying that of that $400k you just got, you need to give $170k to the gubmint. Actually seeing that money leave their account does Maga magic on their minds. "But I EARNED that money. Who the hell are they to take it from ME?!?!?!"

 

[loservol]

So what is the IRS going to do, drag a bunch of teenagers into court? Jail them over $50k?

They'll get letters. They'll get next year's NIL possibly garnished, at the worst. At the very worst, it's a hard lesson. As NIL has existed a couple of years now and I've not seen a single "OMG!!!! NIL got me in deep crap with the IRS!" story, you guys are just petty.

This is all just sour grapes because NIL exists.

Wont be shocked to see debtors prison brought back in the near future.

 

[wmcovol]

So what is the IRS going to do, drag a bunch of teenagers into court? Jail them over $50k?

They'll get letters. They'll get next year's NIL possibly garnished, at the worst. At the very worst, it's a hard lesson. As NIL has existed a couple of years now and I've not seen a single "OMG!!!! NIL got me in deep crap with the IRS!" story, you guys are just petty.

This is all just sour grapes because NIL exists.

They have unlimited power to draft money outta your bank accounts, garnish your future earnings, etc, whatever it takes to get their money.......then if you take steps to stop them, they can prosecute you.

Most players paid their taxes. Some may not have for 2022 yet. I’ve known people to file an extension & not complete filinv for a year later. IRS usually runs 2-3 yrs behind on their audits.

 

[SayUWantAreVOLution]

They have unlimited power to draft money outta your bank accounts, garnish your future earnings, etc, whatever it takes to get their money.......then if you take steps to stop them, they can prosecute you.

I'm aware the IRS is the big bad man. The issue is: what these kids will not file is spilled crumbs to the IRS. They aren't going to "drop the hammer and raid that off campus apartment" searching for money and evidence.

Yes, they might get letters and yes, they might get next year's NIL garnished, even. In the worst case, this might follow them all the way into they're <gasp> 25 or 26yo, maybe even 30!!!!

The IRS isn't looking to jail people or cause lifelong turmoil over a few thousand dollars. As you seem to know, they'll get their money but they're not just waiting like vultures to ruin lives.

 

[37620VOL]

FICA is about 16% alone. Then with the income taxes on $100,000+ with few dependents or deductions & they’ll be close, if not over 50% owned to the govt. Most won’t have that much money set aside unless they got real good financial advice.

14.1% to be exact for a self-employed person. Most of these athletes will end up in the 22% bracket, except for the big stars who will get to find out about the higher brackets. ADs are committing malpractice if they are not recommending a few local tax firms. I guarantee there are some CPA UT grads (probably also donors and NIL contributors) that would do a good job for them.

The really tricky thing is state taxes, often college students are considered residents of their home state, not their University location. Nico would do well to do what it takes to be a legal TN resident.

 

[37620VOL]

The IRS isn't looking to jail people or cause lifelong turmoil over a few thousand dollars. As you seem to know, they'll get their money but they're not just waiting like vultures to ruin lives.

Correct. They'll get a 1099-NEC (unless they form a corporation to receive their NIL), they might go "huh, what dis". They will find a taxpro, probably with UT connections. They will pay the tax owed or set up an installment agreement. NBD

 

[SayUWantAreVOLution]

14.1% to be exact for a self-employed person. Most of these athletes will end up in the 22% bracket, except for the big stars who will get to find out about the higher brackets. ADs are committing malpractice if they are not recommending a few local tax firms. I guarantee there are some CPA UT grads (probably also donors and NIL contributors) that would do a good job for them.

The really tricky thing is state taxes, often college students are considered residents of their home state, not their University location. Nico would do well to do what it takes to be a legal TN resident.

I'm not a tax expert by any means but I thought the "way to do NIL" was setup an LLC. I'd read that because it protects the player personally.

Again, not my area but I recall seeing this a year or two ago when this insulting foolishness all started about "they're not smart enough to have money."