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Unsportsmanlike Conduct: The NFL Bends the Rules When It Comes to Paying Taxes

Unsportsmanlike Conduct: The NFL Bends the Rules When It Comes to Paying Taxes

Forget about those women in pink whining about breast cancer. Ignore those woebegone children in Haiti, the sad-eyed puppies yearning for their fur-ever homes or any of the other losers begging for your hard-earned bucks. If you really want to help the disenfranchised (or perhaps one could say, the overly-franchised) look no further than your favorite professional football organization. Yes, believe it or not: the NFL is a not-for-profit organization.

It bears repeating: the NFL has 501(c)(6) status. Here’s how the category is defined: “Section 501(c)(6) of the Internal Revenue Code provides for the exemption of business leagues, chambers of commerce, real estate boards, boards of trade, and professional football leagues, which are not organized for profit and no part of the net earnings of which inures to the benefit of any private shareholder or individual.”   
Note the language: it doesn’t say “professional sports leagues” – it says “professional FOOTBALL leagues.” 

So, the NFL is not organized for profit — who knew? My bank account suggests that I am not either, so I’m delighted to be in such illustrious company. I’ll watch the Super Bowl next year with a whole new perspective: hey, it’s not an over-the-top commercial phantasmagoria – it’s a FUNDRAISER!

Seriously, folks, isn’t there a problem here? Maybe I’m hopelessly naïve, but my understanding is that the fundamental reason for tax-exempt status is so organizations that work for some greater good – such as juvenile diabetes, social justice, reproductive freedom or the support of religion or trade groups, are not obliged to turn a profit in order to function. Instead, this special status allows them to raise money to serve their constituents and to allow those who donate or participate to benefit financially (in the form of deductions), as well.

One reason this issue has gotten some traction lately is because the NFL, not content with simply basking in their tax-exempt glow, is now asking for dispensation from having to reveal the salaries of key staffers. NFL chief Roger Goodell’s salary, as of a couple of years ago, was a cozy $10,000,000. Apparently the organization doesn’t want the hard-pressed, tax-paying public to get wind of the whopping salaries many of its people are being paid. Furthermore, when teams move to new cities or embark on projects such as building new stadiums, they will often negotiate with local governments for taxpayer money. That sure doesn’t sound very not-for-profit-y to moi.

Yes, the NFL foundation does support some community efforts, such as the laudable program to encourage kids to get an hour of outdoor (or at least physical) play a day. And right in their own locker room looms an issue that is begging for time, attention and funding: the increasing concern about the prevalence of concussions and other head injuries, often suffered by very young players (high school and even earlier), which the NFL now admits can lead to numerous neurological complications as players age and blows accumulate. The need to find ways to prevent these injuries, and treat the ones that exist, is genuinely pressing.

Taxes are a hot-button issue this year (but when are they not?). The Tea Party protesters scream about how health care reform will raise taxes (it won’t) and the GOP drones on with its “tax-and-spend” denunciation, of Democrats in general, and Obama most particularly. I doubt that many folks, apart from hardcore anarchists, would argue that some tax revenue isn’t necessary: firemen need to be paid; bridges need to be repaired; rules and regulations need to be enforced so that those among us who cannot seem to rise above their own base self-interests won’t pollute the waterways or exploit children, etc. Maybe money doesn’t make the world go ’round but tax money does grease the wheels that keep governmental services rolling. It has to come from somewhere, and at the moment too much of it comes from those who can least manage it.

I love football–learned about the game at my daddy’s knee (he was a star quarterback). I’ve been a fan all my life; I even blog for the Patriots. So in that role I say to the NFL: quit it! Stop the charade of being a not-for-profit. Be a responsible corporate citizen and pay your share of taxes. Stop exploiting the 501(c)(6) loophole and join all the other professional sports organizations in admitting that you’re most definitely in it for the money. You can afford it and you’ll be doing your country a service. Play fair.

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9:13AM PST on Feb 6, 2011

You all seen what happened in Egypt!! It's coming to US soil too!! The people are fed up!!!

6:57AM PDT on Apr 3, 2010

Well I can not say I am surprised.. offended yes, surprised

5:38PM PDT on Apr 2, 2010

Sports are big business. So, it does not surprise me if any sport organization would try avoiding taxes.

3:28PM PDT on Apr 1, 2010

thanks for the info, even though it really pisses me off

3:27PM PDT on Apr 1, 2010

i really love football but this is crazy. they make billions but they pay no taxes?

11:46AM PDT on Mar 27, 2010

This is ridiculous! I love sports but the government can make tons of money off of football.

1:42PM PDT on Mar 26, 2010

I did not know that any athletic group was tax exempt. Just another incidence of the rich getting richer..... well, you know the rest.

10:57PM PDT on Mar 25, 2010

First Vick and now this -NFL you make me sick! I boycotted you last season and now I will carry it even farther - I will not patronize any of your sponsors - you will not ever receive one single penny from me even in a roundabout way!

9:50AM PDT on Mar 25, 2010

Several points seem to have been omitted by the author and contributors. First, the member teams of the NFL are not non-profit organizations, which means players, coaches, support staff, and owners are all paying taxes on income derived from participation in professional football. Secondly, even a non-profit organization must pay taxes on income derived from activities which do not support it's non-profit mission. And third (for the person questioning whether the NFL pays sales tax on its tp), non-profit status is not the same as tax-exempt, meaning, yes, they probably pay sales tax on toilet paper!

6:22PM PDT on Mar 24, 2010

Does that mean purchasing a ticket to a game is a tax-deductible donation?

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