On March 26, 2014, the National Labor Relations Board (NLRB) ruled that Northwestern University’s scholarship football players were employees of the institution and could unionize and bargain collectively. From a federal income tax perspective, the significance of the NLRB decision—at that time—was that it could redefine the principle that select student-athletes are no longer unpaid amateurs receiving qualified scholarships, but instead are employees of their institutions, earning scholarship funds in exchange for services rendered as college athletes. Accordingly, a crucial question arising from the NLRB holding was whether the Internal Revenue Service could logically continue to treat qualified scholarships received by student-athletes as excludable from gross income. To analyze the potential effects of federal income tax on qualified scholarships in the future, this Article provides a brief judicial history of the pay-for-play model, analyzes the language of the Internal Revenue Code as it applies to qualified scholarships, evaluates the potential characterization of student-athletes as employees, and concludes that defining student-athletes as employees of their institutions could cultivate a new era in taxing qualified scholarships from a federal income tax perspective.
Kisska-Schulze, Kathryn and Epstein, Adam
"Northwestern, O'Bannon and The Future: Cultivating a New Era for Taxing Qualified Scholarships,"
Akron Law Review: Vol. 49
, Article 1.
Available at: http://ideaexchange.uakron.edu/akronlawreview/vol49/iss4/1