Key Senator to Question Tax Treatment of Booster Clubs

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By BRAD WOLVERTON

The senior Republican on the Senate Finance Committee plans to expand an investigation into the tax-exempt status of college sports, reopening a debate about whether donors should receive tax deductions for contributing to athletics departments.

Last week an aide to Sen. Charles E. Grassley said the Iowa senator plans to question the Internal Revenue Service about the tax status of booster clubs and athletics programs and "what gives the IRS comfort that they have met the requirements of being a charity."

The fresh concerns came in response to a Chronicle article, published online last week, suggesting that contributions to sports programs are eating up an ever-larger share of donations to colleges, and that some athletics programs entice donors with perquisites like free seats on teams' charter flights.

"When I hear stories about top donors to college athletic programs getting a free seat on the team plane," Mr. Grassley said in a written statement, "I wonder what the public gets out of that. We need to make sure that taxpayer subsidies for college athletics-program donations benefit the public at large."

An aide to Sen. Max S. Baucus, the committee's chairman, did not respond to an interview request, making it unclear whether the Montana Democrat shared Senator Grassley's concerns.

Another powerful Congressional panel has also examined the tax status of college athletics departments. Last year the House Ways and Means Committee sent a 25-page letter to the National Collegiate Athletic Association about spending in big-time men's basketball and football programs. It questioned whether increasing commercial interests in those sports had led them to stray from their educational purpose.

The NCAA defended its tax-exempt purpose, and so far the Congressional inquiries have not led to any further action.

While some observers say the latest moves are political grandstanding, the Senate Finance Committee has shown increased interest in requiring nonprofit organizations to better account for their revenue and expenses — an area where experts say many booster clubs and athletics departments fall short.