Two questions regarding scholarships. 1. Is there a specific IRS code/document I can reference to explain that donors cannot select recipients? 2. What have others seen regarding employees of your organization being taxed on scholarships they receive for degree programs (the scholarship program has specific criteria for employees only and an internal selection committee so it doesn't seem to meet the IRS criteria for tax free individual grants). Those that I have spoken with that don't tax seem to be below the $5,250 threshold on non-scholarship tuition reimbursement. Does that indeed come into play in your experience? Just trying to figure out why auditors say it should be taxed while other organizations I speak with don't seem to be following that.
Terry W. Younglove
Director of Operations and Communications
Northwest Community Hospital Foundation 3040 West Salt Creek Lane, Arlington Heights, IL 60005