Q: I recently heard of a move in Congress to take away the non-profit status of the NFL. How can the NFL have a non-profit status with so much money dictating so many moves? I can understand things like charities, schools, churches, etc. being called non-profits, but the NFL? Please elaborate.
—Lance DeLoach, Thomaston
A: The NFL is exempt under Section 501(c)(6) of the Internal Revenue Code because it was organized as a trade or industry association. That section specifically mentions "professional football leagues (whether or not administering a pension fund for football players), along with "business leagues, chambers of commerce, real-estate boards and boards of trade." Attorney Jeffrey Tenenbaum told ESPN.com that the NFL is "an organization whose primary purpose is to further the industry or profession it represents." The NFL receives funding from its 32 franchises to "cover its non-revenue overhead activities such as office rent, league office salaries and game officiating," a league spokesman told ESPN.com. The NFL also collects revenues and distributes them to all 32 teams. The NHL and the PGA Tour also fall under this section, but MLB gave up this status in 2007 and the NBA is a for-profit organization. Sen. Tom Coburn, R-Okla., has introduced the PRO Sports Act, which would take away the non-profit status of the NFL and other pro sports organizations. His "Wastebook 2012" report stated "taxpayers may be losing at least $91 million subsidizing these tax loopholes for professional sports leagues that generate billions of dollars annually in profits."
Andy Johnston wrote this column. Do you have a question about the news? We’ll try to get the answer. Call 404-222-2002 or email q&a@ajc.com (include name, phone and city).
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