The MLB Ineligible List is the "capital punishment" of baseball, reserved for individuals who have been indefinitely or permanently banned from baseball, usually related to throwing games, betting on baseball, or consorting with gamblers, but it also could involve something like embezzlement of funds, or a significant drug-related offense, or a hate crime, or some heinous activity.
Individuals are placed on the Ineligible List by the MLB Commissioner, and once placed on the Ineligible List a player must remain on the list for at least one year.
A player on the Ineligible List does not count against his club's Active List or Reserve List, and he does not accrue service time or get paid while on the list.
An MLB player on the Ineligible List cannot be reinstated from August 1st through October 31st, and a minor league player on the Ineligible List cannot be reinstated from August 1st through the end of his club's season (including post-season).
A player reinstated from the Ineligible List must be added back to his club's Reserve List within 30 days if the reinstatement is made during the club's championship season (regular season) prior to August 1st, or by Opening Day of the following season if the player is reinstated from the Ineligible List during the off season, but if the player is assigned to another club after reinstatement he must be placed on that club's Reserve List immediately.