Potential Tax Implications of NCAA Family Travel Allowances

Abstract

Universities are under fire for their allocation of the significant revenues generated from their highest-profile sports: football and men’s basketball. The criticism stems from the allocation of funding, where most revenue is used to pay salaries to coaches and athletics administrators instead of benefiting the participating studentathletes. The family travel allowance is one small appeasement in addressing such criticisms. While this travel benefit is a generous gesture, there are potential income tax consequences. This article reviews the potential taxation of the travel allowance program. The article concludes with a sample university policy for the provision of travel stipends and a recommendation for an Internal Revenue Service ruling regarding the taxability of this benefit.