Education

Jakeado

I assure you I have done multiple google searches in hundreds of ways at this point. As previously noted, not only does the situation not fit the definition of a scholarship (was not meant to pay for school) but even with the wording you have there, once a 1099 MISC is issued it negates the next line in my view. I truly wish I could be comfortable suing it that way. I have gone so far as to read the legal statues and as much IRS documentation as I can. I give you this as one example of many from Cornell Law:

26 U.S. Code § 117 - Qualified scholarships

(a)General rule

Gross income does not include any amount received as a qualified scholarship by an individual who is a candidate for a degree at an educational organization described in section 170(b)(1)(A)(ii).

(b)Qualified scholarship For purposes of this section—

(1)In general

The term “qualified scholarship” means any amount received by an individual as a scholarship or fellowship grant to the extent the individual establishes that, in accordance with the conditions of the grant, such amount was used for qualified tuition and related expenses.

(2)Qualified tuition and related expenses For purposes of paragraph (1), the term “qualified tuition and related expenses” means—

(A)

tuition and fees required for the enrollment or attendance of a student at an educational organization described in section 170(b)(1)(A)(ii), and

(B)

fees, books, supplies, and equipment required for courses of instruction at such an educational organization.

(c)Limitation

(1)In general

Except as provided in paragraph (2), subsections (a) and (d) shall not apply to that portion of any amount received which represents payment for teaching, research, or other services by the student required as a condition for receiving the qualified scholarship or qualified tuition reduction.

(2)ExceptionsParagraph (1) shall not apply to any amount received by an individual under—

(A)

the National Health Service Corps Scholarship Program under section 338A(g)(1)(A) of the Public Health Service Act,

(B)

the Armed Forces Health Professions Scholarship and Financial Assistance program under subchapter I of chapter 105 of title 10, United States Code, or

(C)

a comprehensive student work-learning-service program (as defined in section 448(e) of the Higher Education Act of 1965) operated by a work college (as defined in such section).