NCAA Transparency Advocate Accuses UCLA of Skirting IRS Rules on Tax Exemptions, NIL Payments

A muckraker alleges that UCLA Football committed tax fraud to poach a quarterback from Tennessee. Even in a cutthroat business that has seen its share of controversy, that accusation raises some eyebrows.

The report comes from FOIAball, a website launched in August 2025 by writer David Covucci to “us[e] public records to… giv[e] readers unique insight into” college football. Citing a cache of emails obtained from UCLA, Covucci described efforts by university administrators, boosters, and donors to funnel hundreds of thousands of dollars of purported charitable contributions to pay Bruins for their name, image, and likeness (NIL). In the process, Covucci contends, UCLA flouted IRS rules on charitable deductions, tax-exempt organizations, and NIL payments.

The matter hinges on the interplay between two entities, both run by former Bruin (and Dallas Cowboys) safety, James Washington. The first is Bruins for Life, an NIL “collective” that UCLA has partnered with—similar to what many other universities have done since the U.S. Supreme Court greenlit college athlete NIL payments in 2021—to collect contributions from donors, bundle the funds, and direct NIL payments to football players. The second entity is Shelter 37, Inc., a charity claiming tax-exemption under Section 501(c)(3) of the federal tax code, for the stated purpose of “provid[ing] life skills, job training, and educational programs” for at-risk youth.

The rub is that, in 2023, the IRS issued guidance stating that NIL collectives should not be considered tax-exempt organizations—the Service’s position being that the collectives primarily confer “private benefits” to certain student athletes, as opposed to furthering a broader public good like proper charities do. The corollary to this (assuming the IRS’s position holds water) is that donors cannot deduct contributions to NIL collectives the way they could donations to proper charities.

This is where emails obtained from UCLA come into play: On October 23, 2024, James Washington emailed staff at the UCLA Athletic Department with “wiring information… to share with our team.” He provided bank information for Bruins for Life. But then, “[i]f donors want the Tax Deduction,” Washington suggested that they be directed instead to a separate account for Shelter 37. It’s unclear exactly what information was ultimately provided to donors, but subsequent Athletic Department emails made provocative statements equating payments to the two entities—for instance, referring to a check from one donor “to Shelter 37 to be used for Bruins For Life.”

Covucci estimates that at least several hundred thousand dollars’ worth of donations were handled in this matter, though it may be well more than that. He notes that, according to Shelter 37’s 2024 tax return (part of which is public, on account of its tax-exempt status), the charity’s aggregate contributions increased sixfold—from $800,000 to $4,800,000—the year its arrangement with UCLA was rolled out.

Both James Washington and UCLA leadership, for their part, deny wrongdoing. Washington told the Los Angeles Times that he was fully transparent, that “every act I’ve taken toward the NIL… has been handled and handed over to UCLA.” A UCLA spokesperson told the Times, “UCLA athletics operates with integrity and transparency, in a manner that is consistent with industry best practices.”

And, in truth, what Covucci and FOIAball have disclosed is smoke, if not quite fire. The propriety of Shelter 37’s expenditures ultimately depends on whether they truly and reasonably advanced its charitable mission. The propriety of any tax deductions the donors might have taken depends on whether the donors reasonably intended their contributions to advance a charitable purpose. We don’t yet know what if any athletes were paid by Shelter 37, or what if anything these athletes did to further the charity’s work (if any football players, for example, were spokesmen for Shelter 37 or helped it raise additional funds); and we don’t know the full story that donors were told about any of this.

Still, Covucci paints a picture of an end-run around the rules—of the interposition of a tax-exempt charity to act as a conduit for NIL payments, to get UCLA boosters the benefit of a tax deduction to which they would not otherwise be entitled, which presumably encouraged the donors to make larger and more frequent contributions. And gave UCLA an advantage in the NIL arms race, enabling it, among other things, to lure freshman quarterback Nico Iamaleava from Tennessee.

For questions regarding this blog post or any other tax related matter, please feel free to contact me at jrillotta@meadowscollier.com.