The magic word here is “educational.” Student-athletes have always been considered unpaid amateurs engaging in extracurricular activities rather than profitable professions. So college sports is deemed part of the educational mission of schools and exempt from income taxes.

There are specific and contentious interpretations of law that prop up this assumption in the modern era. But they have weakened as big-time college sports has taken on the trappings of a profit-driven business far removed from the cloistered groves of academe. It is only through decades of aggressive lobbying and legal battles that universities have managed to avoid income taxes on billions of dollars from broadcast rights, sponsorships and donations from boosters.

The seminal moment came in response to an attempt by N.Y.U. to extend its tax-exempt status to profits generated by C. F. Mueller Company, a pasta maker that had been donated to its law school in 1947. Congress took notice and eventually enacted the unrelated business income tax to capture revenue considered ancillary to a nonprofit organization’s mission. Sensing the threat, the N.C.A.A. pressed lawmakers to make sure that the new tax would not apply to money from school sports programs. Accordingly, congressional committee reports declared that “athletic activities of schools are substantially related to their educational functions,” even citing the supposed educational benefits of football and basketball.

So an escape hatch was opened for college sports. Over the years, the I.R.S. has periodically tried to close it. In the late 1970s, the agency looked at the relatively new stream of television revenue from college games and considered treating it as taxable unrelated business income. This ignited a spirited lobbying campaign by colleges and the N.C.A.A. until the I.R.S. retreated, declaring that selling tickets to fans who go to the school stadium was not all that different from broadcasting games to a television audience.

Clearly the I.R.S. did not foresee the commercialized powerhouse that college sports would become, driven by national television viewership. For example, in the Big East Conference’s first year of operation in 1979, it earned $305,000 for the right to broadcast all of its games; three decades later, ESPN would offer more than $100 million for those rights.

Other attempts to tax college sports profits have been mostly rejected by lawmakers. In the 1990s, Congress did an end run around the I.R.S. and decreed that corporate sponsorships did not amount to advertising, which could be subject to the unrelated business income tax. It was not until the recently approved Republican tax plan that lawmakers reversed course, eliminating a partial deduction for booster donations tied to the sale of game tickets and imposing an excise tax on college employee salaries exceeding $1 million. Over all, however, most athletics revenue continues to flow tax-free.

That means the college sports machine keeps cranking out expensive entertainment, and the scandals that go with it, while sheltered by the scholastic equivalent of a Cayman Islands tax dodge. If President Trump wants to repatriate and tax corporate profits stashed offshore, he might also consider the untaxed billions hiding in plain sight on campuses right here at home.