Scholarship Basics: Tax Compliance, Selection and Supervision

Overview: 

This webinar reviews the Section 4945 excise taxes on taxable expenditures.  It presents the different types of scholarships or grants to individuals made by 501(c)(3) organizations.  This presentation walks through the meaning of awarding scholarships in an “objective and nondiscriminatory basis.”  It introduces the awarding of scholarships based on selection criteria and the guidelines for the persons making the selections, with illustrations of successful and non-successful scholarship programs.  The webinar explains the supervision requirements and how grantors must investigate diversions.  Finally, it introduces record keeping requirements and the content required in requests for approval of grant procedures.

Course Objective: 

• You will understand the excise taxes on taxable expenditures
• You will be able to identify scholarships that do not trigger expenditure taxes
• To identify what are grants "other than 4945(d)(3) purposes"
• To identify when scholarships are awarded on an objective and nondiscriminatory basis
• To understand the meaning of a "charitable class"
• To recognize what are proper selection criteria in selecting grant recipients
• To determine what persons are eligible to be making selections of scholarship recipients
• To recognize differences between successful and not-successful scholarship programs
• To identify the information required to reported by scholarship recipients
• To recognize the procedures needed for investigation of diversions
• To identify what record-keeping is needed
• To identify the content for a request for approval for procedures for awarding grants

Target Audience: 

• Legal and Tax Professionals
• Accountants and Bookkeepers
• Paralegals 
• Law Students

Basic Knowledge:

Familiarity with basic legal concepts and an understanding of federal income taxation principles would be beneficial but not mandatory.