Scholarship and Fellowship Grants: An Administrative Merry-Go-Round
tax law, income tax, educational grants, scholarships
A well-educated citizenry is one of our most important national interests. In recognition of this, Congress has made education one of its most important legislative subjects. The Internal Revenue Code has even been touched by Congress' attempt to aid education. For example, Section 117 of the Code, enacted in 1954, provides for the exclusion of scholarships and fellowship grants from gross income. This is the first provision in the income tax law dealing specifically with such grants. With it, Congress intended to clear up a great deal of confusion that arose under the old law regarding the tax status of educational grants. In spite of the new section, however, the present tax treatment of thse grants differs little, if at all, from that under the old law, and the confusion remains as to what constitutes an excludable grant.
William Tabac, Scholarship and Fellowship Grants: An Administrative Merry-Go-Round, 46 Taxes 485 (1968)