College athletes with NIL deals could face problems on Tax Day 2022, says the Florida attorney
Student–athletes they had a chance to profit from their names, images, and likenesses last summer after the NCAA passed a new policy that allows them to earn money from sponsorships, sponsorships, social media and more.
But, according to a Florida attorney, this new opportunity comes with some unexpected obstacles.
Peter Schoenthal, a criminal defense attorney and entrepreneur, told FOX Business in a recent interview that student-athletes do not receive proper guidance when it comes to NIL deals and the biggest problem they will face this year may be the Tax Day.
“We’re not doing a good enough job in space to educate student-athletes about what’s important. Yes, it’s important to make money. Yes, it’s important to build your brand, but what comes with it? Taxes are the main thing.” Schoenthal explained.
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“We’ve seen so many student-athletes who have no idea what a 1099 is. We have so many student-athletes who didn’t know what a W9 was. You’ve had student-athletes who didn’t know when they made money they had to save it. some to pay taxes.
“You are really entering a very scary situation.”
Schoenthal spent time coaching youth football in Florida. Many of his athletes went on to play in Alabama, Miami, Florida State and LSU. But when the opportunity arose to start making money, he feared they were unaware of everything that happened in these deals.
“How are these kids going to pay their taxes? I don’t want to represent them in a federal court on tax evasion charges,” Schoenthal said.
“Right now, we are asking student-athletes to venture into this new landscape where they are unsure of the rules and unsure of the law, both in regards to NILs and taxes. And we’re asking 18- 21-year-olds just to understand it. Unfortunately, we are focusing on the wrong things.
“We’re focusing on the things that bring money, which is great, but we’re not putting the same effort and energy into protecting them when they get their money and protecting their money. And it’s just becoming a new way to take advantage of money. student-athletes and taxes is something that will be a problem especially this first year. “
Schoenthal is the founder and CEO of Athliance, an NIL education and management company that advises college athletes with regulations while making the most of NIL opportunities.
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“We license our software to universities so that when student-athletes get NIL agreements they can enter the terms so compliance can review them to make sure they are not being exploited or break any rules and disclose their agreements and the terms we provide. student-athletes with what we call fact tax reporting, “he explained.
“Student-athletes will always know who paid them, how much, what service and in what state, so they can file the appropriate taxes and deliver that report to accountants to make sure they never have to represent them in federal court.”
Schoenthal recalled several “misconceptions” he heard about these deals from talking to college athletes, an issue that will come up on tax day.
“You’ll see a lot of student-athletes, I think, on a pay-off plan with the federal government, and I think a lot of that has to do with the fact that we didn’t properly educate these students well enough so they were prepared for it.”
The new era of NIL agreements has been greeted with reluctance by some. Alabama coach Nick Saban said in an interview with the Associated Press that the current facility is not “a sustainable model”.
“This creates a situation where you can basically buy players,” Saban said. “You can do that in recruiting. I mean, if that’s what we want college football to be, I don’t know. And you can also get players to go into the transfer portal to see if they can get more somewhere else they can get to. in your house.”
Paying a player to attend a particular school is still a violation of NCAA rules, but NIL agreements quickly became intertwined with recruiting, both among prospective high school clients and the growing number of college transfers.
“It’s okay for the players to get money. I’m for it. I’m not against it. But there also has to be some responsibility on both sides, which you might call a contract. So that you have the opportunity to raise people in a way that it will help them succeed, ”Saban said.
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Schoenthal agreed with Saban, pointing to legislative matters.
“I think it’s altering the landscape, but I don’t think it’s necessarily a bad thing,” Schoenthal said. “I think college athletes should have been able to profit from their name, image and likeness forever. In our country – in a capitalist society – you are always able to profit from who you are if you are able to offer value for money. service.
“The problem with space right now is that we don’t have uniform legislation with effective enforcement going on. So space has become the wild west, and when you have the wild west, you have wild actors and people trying to take advantage of it. it.”
Schoenthal is doing its part to educate college athletes about these deals and what will benefit them most in the long run.
“When you look at financial literacy, this is where, when we discover space, name, image and similarity agreements have the ability to be the greatest thing that has ever happened to college athletes because education is. now, finally practice “.
The Associated Press contributed to this report.