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Taking Aim at the NCAA’s Tax Status

Sen. Charles Grassley’s recent crusade to question the National Collegiate Athletic Association’s tax-exempt status draws applause from Jack Siegel, a Chicago lawyer who writes the blog, Charity Governance.

Mr. Siegel says Mr. Grassley, an Iowa Republican, frequently oversteps his bounds when questioning the pay and incentive packages of charity leaders. Those questions are, by law, supposed to be asked by the IRS and state regulators, he says.

In the NCAA’s case, though, Mr. Grassley is asking appropriate questions, Mr. Siegel writes.

“As the ranking member of the Senate Finance Committee, Senator Grassley has finally returned to the core function of the Senate Finance Committee, review of the tax laws and the value returned to society from tax subsidies,” Mr. Siegel writes.

But while Mr. Grassley is asking the right questions to determine whether the big-money NCAA should have tax-exempt status, Mr. Siegel says he could be entering dangerous territory politically.

“College athletics is not the Smithsonian or American University, with a lax board and an apparently greedy chief executive. It is not the American Red Cross, which has admittedly had its share of problems,” Mr. Siegel writes. “One of the NCAA’s constituencies is alums. Another is sports fans. These folks live in every congressional district in the country. Senator Grassley can expect a vigorous and well-funded fight to maintain the status quo.”

Does the NCAA deserve to keep its tax-exempt status? Is Congress right in asking questions about the organization?

Click on the comments link just below this posting to share your thoughts.

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