Yes it is. There is no mechanism or will to enforce rules so you can do whatever the hell you want.
Printable View
I've heard two tales in the past few days about NIL.
1. A MBB coach said he was talking to a kid who agreed to transfer in, but needed his NIL money to be bumped up $XXX because he needed to pay taxes on last years NIL $$$, that he already spent! Ha. MAny are forgetting that Uncle is gonna get his share!
2. A HS coach went on a visit with a kid, they talked to the HC and the collective. Never went on the first campus tour or discussion with academics. It isnt about selling a degree anymore.
Part of the difference is those in the trades were W2 employees...so there was money taken from each check to offset a large hit on 4/15...Collective is just a 10/99 check...and kids that have never really had any significant income don't really think about that stuff....but Society (and Uncle Sam) will eventually remind them!!
Also, having been an 18-22 year old at one point in my life (I actually played in my first post High School Football game at 17), and knowing how much trouble I managed to find during those years....If I was getting $5k or $10k a month while I was in college, NOTHING of The Lord would have come from that money!!! I probably would have spent it $1 at a time...with the occasional $5 pitcher (yeah, strippers would work for a buck and pitchers were only $5 in the 90s...just not at the topless bar!).
Taxes are pulled directly from that check with a W2/W4. NIL deals are completely separate. They aren't a W4. They aren't taxed up front, or at all.
It's a 1099 situation where you have to know to pay taxes on your own, how to plan for it, how to set aside, etc. Not that there isn't resources for this, but the information isn't given to the kids with it. These kids all of a sudden have 10, 20, 50, 150k, 1m, et. hit their accounts and everything else disappears.
It's also not unique to kids in the NIL. In the world of content creation being as large as it (Twitch, YouTube, Kick, OnlyFans, etc.), or the world of consultancy, where some haven't been/aren't paying quarterly taxes or working with an accountant to make sure things are being handled correctly.
No, taxes aren't a secret. However, you whiffed extremely hard on the "I saw people at a W2/W4 that didn't have tax issues so the fact that some of these kids have tax issues due to ignorance should never happen."