Cases & Developments

U.S. Internal Revenue Service Office of Chief Counsel Memorandum on Whether Operation of an NIL Collective Furthers an Exempt Purpose Under Section 501(c)(3). The memo concludes that “many organizations that develop paid NIL opportunities for student-athletes are not tax exempt as described in section 501(c)(3) because the private benefits they provide to student-athletes are not incidental both qualitatively and quantitatively to any exempt purpose furthered by that activity.” The memo notes that many NIL collectives may already have received favorable determination letters and that these may be candidates for section 7805(b) relief from retroactive enforcement upon reconsideration of their exempt status.