In PLR 201002046, the IRS ruled that grants made by a private foundation to a publicly supported organization for the purpose of providing scholarship awards to individuals did not constitute taxable expenditures under the Internal Revenue Code. The scholarship recipients were selected based on their scores in a national competition. The private foundation sponsored a specific number of scholarships each year to be awarded to the children or relatives of employees of a specific company. The private foundation did not participate in the selection of scholarship recipients, nor were the scholarships used as a means to induce or recruit employees.
Posted by Jenny Robertson, Associate Editor, Wealth Strategies Journal.
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