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A news story that asserts President Donald Trump’s feud with the National Football League led him to revoke the organization’s nonprofit tax status is a trick play created by a fake news website.
The headline on an Oct. 9, 2017, post on ConservativePaper.com read, "President Trump signs executive order stripping NFL of ‘non-profit’ status."
Facebook users flagged the content as possibly being bogus, as part of the social network’s efforts to curb fake news stories. The same story appeared on several other websites reported by Facebook users.
The story, which is fake, said Trump on Oct. 8 had revoked the NFL’s "401(c)(3) status ‘until it is clear that players and team owners respect their country.’ " (There is no such thing as tax-exempt 401(c)(3) classification in the tax code.) This was a response to players protesting racial inequity by kneeling during the Star-Spangled Banner, which has raised Trump’s hackles in recent weeks.
Now, it may surprise some to know that the NFL’s league office did have tax-exempt status as a 501(c)(6) nonprofit — a tax classification for business leagues, chambers of commerce, real estate and trade boards and yes, professional football leagues. The change in the tax code was granted in 1966, to allow the NFL and AFL to merge without the threat of violating anti-trust laws.
The league office essentially acts as a trade organization for the individual teams, which are what make most of the league’s profits, which are taxed. This is different than 501(c)(3) status, which is for charitable organizations.
But the league voluntarily gave up its tax-exempt status in 2015 after being criticized by politicians who thought the entire league was avoiding taxes.
"As you know, the effects of the tax-exempt status of the league office have been mischaracterized repeatedly in recent years," NFL commissioner Roger Goodell said in the letter to team owners that year. "The fact is that the business of the NFL has never been tax-exempt."
Trump also brought up the issue on Oct. 10, when he tweeted, "Why is the NFL getting massive tax breaks while at the same time disrespecting our Anthem, Flag and Country? Change tax law!"
But he didn’t sign any executive order rescinding the league’s tax status, which it had voluntarily changed already.
The fake story appeared to originate two days before Trump’s tweet, in an Oct. 8 post on FreedomJunkshun.com, which looks to be member of a series of fake websites associated with Christopher Blair, a self-described liberal troll who creates fictional stories to try to fool conservative readers.
FreedomJunkshun.com uses the same website architecture as other Blair-affiliated sites, and carries a disclaimer that reads, "All people, places, names and images should be considered fictitious or fictitious representations."
After further review, our ruling on the story stands: Pants On Fire!
ConservativePaper.com, "BREAKING: President Trump Signs Executive Order Stripping NFL Of ‘Non-Profit’ Status," Oct. 9, 2017
FreedomJunkshun.com, "BREAKING: President Trump Signs Executive Order Stripping NFL Of ‘Non-Profit’ Status," Oct. 8, 2017
Time, "Why the NFL Suddenly Wants to Pay Taxes," April. 28, 2015
PBS, "National Football League surrenders tax-exempt status," April 28, 2015
PunditFact, "If you're fooled by fake news, this man probably wrote it," May 31, 2017
U.S. Rep. Matt Gaetz, "Gaetz Tells NFL Tax Breaks to Take a Knee," Sept. 26, 2017
Twitter, Donald Trump tweet, Oct. 10, 2017
Internal Revenue Service, "Types of Organizations Exempt under Section 501(c)(6)," accessed Oct. 10, 2017
Internal Revenue Service, "Professional football leagues," accessed Oct. 10, 2017
Congress.gov, "H.R.296 - PRO Sports Act," accessed Oct. 10, 2017
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