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Archive for Sunday, September 28, 1997

KU STRIPS LETTER WINNERS OF DISCOUNT TICKETS

September 28, 1997

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An IRS audit prompted KU to eliminate a sports ticket discount for former athletes.

Varsity athletes at Kansas University thought giving everything to the game earned them a lifetime discount on Jayhawk sports tickets.

That was before Internal Revenue Service began poking around KU in search of tax code violations.

In response to the ongoing audit, the KU athletics department this month sacked a program that allowed men and women letter winners to buy one ticket to all KU sporting events for 50 percent off the normal price.

"It was a difficult decision for us," said Bob Frederick, KU's athletics director.

Last year, 287 club members acquired discounted football tickets and 189 members bought discounted men's basketball tickets. A participant attending only football and men's basketball games this season would have saved $300.

Frederick said a 20 percent ticket discount for KU faculty and staff would remain. That was cut from a maximum of 50 percent when the IRS audit began in 1995. The agency ruled KU employee discounts in excess of 20 percent had to be treated as taxable income.

Frederick said in a letter to K-Club members that IRS officials believe KU's ticket policy provided a private benefit to letter winners. That could threaten KU Athletic Corp.'s tax-exempt status and jeopardize the department's fund-raising operation.

He said the demise of cut-rate tickets for K-Club members would remove "the suggestion of impropriety."

Quintin Schonewise, past president of K-Club and a KU football player in the early 1980s, said reaction from members had been muted.

"If that's the policy, that's the policy," he said. "The membership of K-Club is going to support KU events no matter what the situation is. We'd go even if we had to pay double."

Jan Kozma, chair of KUAC and professor of French and Italian, said the university was at the mercy of IRS mandates.

"When dealing with the IRS, whether I think it was a good idea or not is quite beside the point," Kozma said.

IRS investigators started the KU inquiry at the KU Endowment Association before moving 13 months ago to KUAC. Agents are focusing on advertising revenue and ticket discounts in the athletic department, Frederick said.

"There may be more changes whenever we get the final word from IRS," he said.

Other Big 12 Conference universities have reformed or plan to reform ticket policies to avoid problems with IRS, Frederick said.

The IRS has examined at least 20 major research universities in the past five years. An investigation at the University of Nebraska ended in 1994 when NU agreed to pay $150,000 in penalties and reform policy.

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