Internal Revenue Service

Sports Franchises: IRS Audit Techniques Guide Internal Revenue Service

Although this guide focuses on major league sports franchises, the examination techniques and issues addressed also have relevance to the examinations of minor league sports franchises. Potential emerging sports franchise issues addressed in this guide are distinguished from established sports franchise issues. Any emerging sports franchise issues are addressed at the end of the applicable issue chapter. Each of the major sports leagues is represented by a league association. The primary purpose of the league association is to promote the sport, negotiate national TV broadcast rights, negotiate national sponsorship agreements, and protect the interests of the sports franchise owners and the sports league as a whole. The individual sports franchises in the league are members of the league association. League associations are operated as tax exempt organizations under IRC section 501(c)(6).