12
Wednesday, August 23, 1978
University Dally Kansan
IRS silent on progress of athletic hearings
By LEON UNRUH Sports Editor
An Internal Revenue Service order that had been heralded as a boon to the service and as a threat to the business of student loaners had done what some people had predicted.
A year after it was issued, it seemingly has some nowhere.
The order, filed against the University of Kansas Athletic Corporation, Southern Methodist University, Texas Christian University and the Cotton Bowl Association, had sought tax money from revenues produced by broadcasting college athletics.
The order was appealed to the national IRS appeals board last September, several
months after it was issued. The investigation and hearings have not taken place.
KU AND NCAA officials say they haven't heard anything about the investigation's progress. IRS officials won't talk about it because of a law that prohibits discussing cases with anyone except the people or corporations involved.
"The whole thing has stagnated," Doug Messer, KU's assistant athletic director, told The New York Times.
The IRS contends that broadcasting revenues are not related to the school's primary function of education and therefore should be taxed.
The schools and corporations argued that the games over the air are no different from the games they had given. That money is not taxed, they said, and the broadcast profits should not be taxed.
The investigation order came after an audit last summer that was concerned mostly with television revenues, which are the most lucrative contracts.
THE SERVICE did not say why those schools and the Cotton Bowl had been picked for the audit, which covered records for the three years ending in 1977. The service's Wichita office audited KUAC's books. The Dallas office coordinated the investigation.
Lawyers from the schools and the bowl were joined by a lawyer from the NCAA, which acts as a general aide to its member schools.
The NCAA also has contracts with ABC-TV for football ($18 million), with NBC-TV and TVS for basketball ($4 million) and arrangements worth as much as $15 million.
Those contracts and individual conference's broadcasting contracts would also
A DALLAS OFFICIAL said last year that if the decision was appealed, it probably would take several years of litigation before a final decision was made. If the decision goes in the IRS' favor, he said, the service must put the power to tax any college in the country.
KUAC estimated that it could be forced to pay as much as $100,000 to $150,000 for the equipment.
Mike Davis, KU general counsel, said the IRS apparently had considered the case worthy of a lot of attention. He was surmised that he'd been sent down about the investigation.
"It a little pecular, considering the people who were there (at the hearing)," he
"The deputy commissioner was in the room. The general counsel was in the room. They were people that are usually not brought in for a general tax-advice case."
DON CORDES, A lawyer with the Wichita law firm of Foulston-Skein-Powers & Ewing in Fulton.
KU, said the IRS had not been unanimous in its first ruling against the schools.
"Somebody told me that the undersecretary of the treasury or an assistant commissioner testified that he thought we shouldn't be taxed," he said.
The reason for the slow decision on the appeal was anybody's guess. Cordes said.
"There's been some change in personnel that might have slowed them up."
Marlene Gaysek, the public affairs officer of the Dallas IRS office would not venture a guess on when the case might come up or on its verdict.
"It really depends on the issues involved and how complicated a case is. It can take years to find."
Bennett breaks habit, seeks limit on property taxes, state spending
TOPEKA-Gov. Robert F. Bennett, who opposed a property tax lid while he was in the Kansas Legislature, yesterday called for constitutional amendments to limit taxpayer access to his testimony before the Platform Planning Committee of the Kansas Republican Party.
Could it take longer . . . maybe more than a year?
Democrats reacted swiftly to his proposals. Statements from the Democratic candidate for governor and the chairman of a national committee denounced the proposals as political rhetoric.
"Over the past eight years, the governor opposed virtually everything he recommended in his statement," said House Speaker Bernett's bid for re-election this week. Bennett's bid for re-election this week.
"I guess it's better late than never, but I
still find it unbelievable. "Terry Scanlon, state party chairman, said."
BENNETT PROPOSED a series of amendments that would create a uniform property tax lid, require the Legislature to adopt spending limitations and require a two-thirds vote in the Legislature before increasing income or sales taxes.
To help finance local programs normally financed by property taxes, he suggested a variety of increases in state aid to local millions, with an estimated cost of $115 million.
"STATE AID to local government has increased by more than $175 million during my administration, which has served to reduce greatly the burden of the property
"It's been known to do that," she said
tax," Bennett said. "This represents an 80-percent increase in state aid to local units of government, and where we can do more, we will."
Included in those spending plans are state financing of 49 percent of all costs for elementary and secondary education, unified courts and special education. Also, it would increase state revenue sharing by 2 percent.
City rejects flood-plain rezoning
However, Carlin said, "The governor has always been opposed to state aid to local government. Now he wants us to believe he is the concept and is recommending more aid.
The Lawrence City Commission last night unanimously rejected a controversial request to rezone a section of the flood plain in southwest Lawrence that would have allowed construction of multiple-family dwellings.
In other action taken during the meeting, the commission approved a site plan for the construction of an office-motel complex on West Sixth Street.
Neighbors in the area, located just south of 23rd and Iowa streets between Lawrence and Atchison avenues, said construction of apartments and duplexes proposed for the area increased flooding in the area as well as create traffic problems on Lawrence Avenue.
The commission rejected the proposal by a commercial developer, saying that while the potential drainage and traffic problems that would occur were questionable, such a development would be unfair to land owners who had constructed homes in the area thinking it would remain zoned only for single-family dwellings.
"This area was zoned single-family as a conscious act of the previous owners and the city." Jack Rose, city commissioner, said. "Building multiple-family dwellings would infringe on the best interests of the whole neighborhood."
The proposed building complex would be
located on a plot of land between the Casa del Sol restaurant, 25215 W. Sixth St., and Kay's Westside 66 Service station, 2815 W. Sixth St.
In addition to approving plans for sewer and street improvement, including widening and repacing of north Iowa Street, the commission heard a request from a city planner asking for an increase in the rate charged to city consumers. No action was taken on the request.
At next week's Tuesday meeting, the commission is scheduled to take up a controversial land-use issue centering on the construction of the Sunrise addition, a building financing development to be constructed at the corner of Ninth and Michigan streets.
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"THIS IS completely unbelievable," he said. "I can't believe that after opposing the property tax lid for over eight years, Gov. Bennett would now suddenly try to present himself as a person concerned about Kansas taxpayers."
Scanlon said, "the governor seems to think he's really gotten the jump on Democrats this time—only he's eight years too late.
"I don't think the people of Kansas believe him. And I can't believe he believes himself."
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