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12th Man+ NIL fund shuts down based on IRS guidance

Well it was fun while it lasted.

NCAA Football: Tennessee at Texas A&M Jerome Miron-USA TODAY Sports

Less than six months after its launch, the 12th Man+ Fund, the NIL-centered arm of the 12th Man Foundation, is being shuttered. This is being done in response to Internal Revenue Service (IRS) guidance that was released in June that could have put the organization’s non-profit (and tax-exempt) status in jeopardy.

The pertinent portion of that IRS guidance reads:

“Because the private benefit from a nonprofit NIL collective’s activities, in most cases, will not be incidental in a qualitative sense, and because a single nonexempt purpose, if substantial in nature, precludes exemption, we believe such collectives are not organized and operated exclusively for exempt purposes,”

The 12th Man Foundation is the primary fundraising organization for Texas A&M athletics, and is the organization through which Aggies purchase season tickets and make financial donations for facilities upgrades.

While the 12th Man+ Fund appeared to be in the clear from NCAA sanctions thanks to new state laws, there is likely little that could be done to skirt the ire of the IRS. While the 12th Man+ Fund is the first entity of it’s kind to shut down as a result of this IRS guidance, it likely won’t be the last. Several similar funds had either already launched or were in the works at other major college football programs.

As has been the case for two years, NIL continues to be an ever-evolving landscape, with athletic programs pushing the boundaries as far as they can to find out where the actual guardrails are.