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BCS Faces Possible IRS Inquiry 2/26/2011

According to an article published on, three of the four BCS Bowl entities are alleged to have engaged in questionable tax practices.  A third party Political Action Committee known as Playoff Pac filed the complaint with the IRS alleging "tax irregularities" and contesting the tax exempt status of the Fiesta, Orange, and Sugar Bowls obtained as a result of their non-profit designations.  The complaint reportedly cites lavish trips unconnected to approved business activities and excessive compensation for officers and employees of these entities.  The core of the complaint reportedly challenges the need for tax exempt status for entities capable of producing and expending large sums of money in this manner. 

It is unclear whether the complaint will trigger IRS audits or other IRS tax issues for these entities.  In recent years the IRS has taken on the role of a compliance agency with respect to those entities claiming tax exempt status and ensuring that such entities meet the requirement of the tax code that justify tax exempt status.  

Non-profit organizations must not confer private benefits and the activities of the organization must further their stated non-profit mission or objective.  Most Bowl entities are dedicated to the purposes of advancing higher education.  However, the income produced by these entities is startling.  The net assets of the Sugar Bowl in 2009 were reportedly 39 million dollars in value.  Executive salaries in some cases exceed 500,000 dollars and have approached the 1 million dollar mark in recent years.

The IRS has demonstrated in recent years that it will not shy away from investing entities for tax violations of even the Red Cross or the Smithsonian.  The BCS would likely be subject to impartial scrutiny by the IRS for alleged tax issues as would any other organization.  Due to the abuse of the tax exempt status qualifications by certain entities and the rough economic environment, the IRS may increase activities in this area. 

(For the full article visit


If you are facing tax problems or have issues with the IRS, contact the tax lawyers and attorneys at Tiller Law.  Tiller Law represents clients facing a variety of tax issues from 1099 tax liability for forgiveness of debt, back taxes, unfiled or nonfiled tax returns, IRS audits, payroll tax issues, offers in compromise and more. 

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