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We now address petitioners' argument that the amounts paid
to petitioner by NUS were provided pursuant to a fellowship
arrangement. Petitioners' argument in this regard, as we
understand it, is that amounts received pursuant to fellowships
are not considered wages under the Internal Revenue Code, and,
therefore, petitioner was not an employee of NUS.
Petitioners do not cite any case law or statute to support
this position. We believe, however, that petitioners have in
mind the provisions of section 117. Section 117(a) excludes from
gross income "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)". The term
"qualified scholarship" refers to "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". Sec. 117(b)(1). Furthermore, to qualify for the
exclusion, the payments cannot be conditioned upon the
recipient's providing of services, such as teaching or research.
Sec. 117(c).
In this instance, petitioner has offered no proof that he
was a degree candidate at NUS or that he used any portion of the
proceeds for qualified tuition. Additionally, as more fully
discussed above, petitioner has failed to establish that he was
not required to perform teaching, research, or other activities
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