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(C) The recipient is not required to reapply to
the grantor in order to receive the scholarship or
fellowship grant in future academic periods.
We note at the outset that proposed regulations "generally
carry no more weight than a position advanced by respondent."
Estate of Wallace v. Commissioner, 95 T.C. 525, 547 (1990), affd.
965 F.2d 1038 (11th Cir. 1992). However, because both parties in
this case accept the criteria stated in the proposed regulation
in question, the Court will use it as a framework for resolving
their dispute.
Petitioner argues that, pursuant to the proposed regulation,
the fellowship amounts he received in 1989 and 1990 should be
considered granted before August 17, 1986, and that he is
therefore entitled to exclude those fellowship amounts from
income under the earlier version of section 117. Respondent
argues that the requirements of subdivisions (B) and (C) in the
above excerpt of the proposed regulation have not been met, that
section 117 as amended therefore applies, and, in any case, that
petitioner was not a candidate for a degree during the years in
issue.
We will first address the aspects of the transitional rule
over which the parties are in disagreement. Respondent argues
that petitioner's initial MARC fellowship grant did not contain a
"firm commitment" to provide fellowship support for more than one
academic period--thus, in respondent's view, the requirements of
subdivision (B) of the proposed regulation have not been met.
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