In over the summer, the IRS started sniffing around A&M's 12th Man+ NIL fund, sending a letter in August putting their 501(c)(3) status is jeopardy and indicating that they would be taxing donations. Also, this fund was part of the school's foundation. In June, the NCAA stepped in saying schools could not operate their own collectives, but Texas state law was changed to permit that, however federal taxes issues remained a problem. 501(c)(3) donations for charities, schools, and general scholarships are deductible; but not for paying targeted individual deals or sports-related deals. Therefore, A&M immediately shut the NIL fund down.
They launched a new fund in September with Texas Aggies United. Under this fund, all donations were taxed. Businesses may be able to write-off some taxes, if they get advertising or something like that out of it. Rumors were that individuals later taxed under the old fund, were very upset. Thus, the new fund had a shortfall, and A&M could not honor most of the NIL deals. They just do not have the money.
The 12th Man+ Fund was the first internal organization created for NIL fundraising
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