Alumni Clubs May Lose Tax Free Status

Alumni booster clubs and similar athletic recruiting bodies were dealt an economic blow last week when the Internal Revenue Bureau ended their tax free status. Athletic scholarships as such were not affected, but the bureau will tax alumni monies used to pay for campus visits of prospective athletes.

The Internal Revenue Bureau ruled that "An organization which raises funds to be used in travel and other activities to persuade prospective students with outstanding athletic ability to attend a particular university, and which is not an intergral part of such institution, is not exempt from Federal Income Tax as an educational institution." Contributions to such booster groups can no longer be deducted from personal income taxes, the Bureau said.

Effect on Ivies Uncertain

While this ruling would have an obvious impact on such groups as Stanford's "Buck of the Month Club," its impact on the heavily regulated Ivy League is still uncertain. The Ivy League bans "try outs" and prohibits alumni clubs from paying travel of prospective scholar athletes to the Ivy schools. Alumni do, however, expend considerable personal and/or club funds on trips to interview the prospects in their areas. Such expenses under the new rule could no longer be exempted as contributions to charitable institutions. Expenditures of Ivy coaches are still met by the universities themselves, which are excluded from the tax bureau's edict.