NCAAs tax-exempt status challenged

Joe Shell Jr. knows how this goes. Lots of people over a whole lot of years have taken shots at the NCAA -- and for all sorts of reasons.

Mostly they've missed. Whether those folks came at the bureaucratic governing body of college athletics on legal, moral or political grounds, the Indianapolis-based behemoth has proved pretty much impervious.

Which is why Shell, an analyst for a Long Beach law firm and a USC guy all his life, has taken his time. And thought this through for much of the past year until he felt he'd gotten his challenge just right.

This weekend, Shell has put into motion a takedown move to strip the multimillion-dollar-generating "for-profit" giant of its tax-exempt staus. And he's using the NCAA's own actions against it. Actions that in the USC case, for example, clearly contradict the group's lofty mission statement that its president, Mark Emmert has touted on his two trips this last year to Los Angeles.

What Shell has done is file IRS Complaint Form 13909 outlining why the NCAA, in explicitly ignoring its own stated goals, no longer deserves to escape paying taxes on its more than $26 million profit on more than $636 million in income the last year it reported its financials, according to files leaked this week to Deadspin.

There's an additional feature of this approach that Shell urges anyone reading this who agrees with it to do. Go to www.IRS.gov and download Form 13909 and they too can file a complaint about the NCAA's tax-exempt status with the IRS.

"It'd be nice to see a couple of thousand more of these filed with the IRS," Shell was saying. His complaint, in letter form here, Joe Shell letter 11/17/11 was being hand-delivered to the IRS and a number of contacts in Congressional offices in Washington that Shell and his informal group have been working with for months. But one could be enough.

"I think the NCAA is going to have a great deal of trouble answering this," Shell said. In the only other previous challenge to the NCAA's tax-exempt status, the organization said it absolutely needed to stay as a "for-profit" but tax-exempt entity.

How else could it carry out its mission of enhancing and elevating the college competitive experiences of student-athletes while maintaining a level playing field, it argued. It needs that more than $360 million in the bank to do so. And that $636 million annual check from CBS for "March Madness."

And yet while sweeping in that money with one hand and extolling the values of a college education as well as postseason tournaments and bowl games with the other, the NCAA has been depriving totally innocent student-athletes of those same college experiences by taking away scholarships and bowl games if they happen to go to the wrong school.

So you have a situation in the USC case, which Shell says "is by far the most egregious example of the NCAA violating its stated mission," where the organization said two exactly opposite things in the same 60-minute press conference.

The main perpetrator in this case is familiar to USC fans. If only Miami AD Paul Dee had been as familiar to NCAA muckety-mucks. But the man who presided over the two greatest scandals, excepting the unraveling Penn State tragedy, in modern college sports history, spoke out of both sides of his ample mouth in delivering the USC sanctions from Committee on Infractions that he chaired.

Two full classes of USC football players, completely innocent of any NCAA violations since they were in grade school at the time, would be deprived of the bowl experience the NCAA valued so highly, Dee decreed.

Valued that so highly that the NCAA added an additional "free agency" ruling allowing Trojans juniors and seniors, willing to trade their USC degrees for ones at Tennessee, UConn, Louisville and Dee's own Miami in order to play in a bowl game, to leave with no penalty immediately. It was that important that they would not be required to sit out a transfer year.

Who would be required to sit out would be well over 100 USC football players. All mandated by an NCAA pledged to further their student-athlete experience. But decreeing they would sit out two bowl years, including this season, which after last night's upset of Oregon would probably mean a BCS bowl berth.

But the bowl ban pales in comparison to the as many as 30 young men who will be denied life-changing USC football scholarships. That's right, the organization that says its mission to support student-athletes is of such great civic import that it should be allowed to take its millions of dollars of profit from its many money-making enterprises to support those endeavors -- and not pay any taxes on them.

And then it turns around and takes away scholarships from 30 of the most needy and most innocent. Scholarships, by the way, that will never be offered to anyone. Because with the numbers limitations in college football, the specific USC scholarships denied might all be offered by the other 11 Pac-12 schools to the top prospects.

But as the numbers move down through the 120 FBS schools, at the bottom end, 30 young men somewhere in the nation will not be offered a major college football scholarship. And they'll never even know how it happened that they were denied their chance by the NCAA.

Their opportunities will be gone forever. And the NCAA is good with that. As Emmert said of the Committee on Infractions when asked about the USC case on his first visit to LA some months back: "I think they got it right."

Well, Joe Shell thinks they got it wrong. Very wrong. Wrong in ways that are cruelly uncaring about the very people the NCAA says it's in business to encourage, protect and help. How exactly, Shell asks, is depriving Matt Barkley of two bowl game experiences helping him as a student-athlete?

How exactly is depriving those 30 nameless, faceless potential USC scholarship awardees helping them or the ones who ultimately go without scholarships?

And how, Joe Shell asks, should the NCAA be allowed to do this with the money of millions of U.S. taxpayers subsidizing it?

How indeed?

Which may be the real beauty of Shell's approach. In a time of trillion-dollar deficits with no easy fixes available, here's a quick fix that Democrats, Republicans and Independents alike can get behind.

NCAA bureaucrats like to say it's not about them, that the NCAA is every one of its 1,000-plus member schools. But try to imagine any college president you know stepping up to defend depriving anyone deserving of a scholarship or a bowl game experience just because of where he goes to school?

They're not going to come near to defending that sort of discrimination. That's why Joe Shell's shot at the NCAA's financial underbelly has a real shot here. Time to step up to the bar, IRS. For once, that cheering you hear will be for you.

Dan Weber covers the Trojans program for USCFootball.com. You can reach him at weber@uscfootball.com.