Tax-exempt private foundations that award scholarships and grants must meet certain requirements. The IRS recently issued private letter rulings for three foundations. One, which makes grants to alumni of certain schools, won’t be taxed on related qualified expenses. A second foundation makes awards to dependents of its employees for college. It won’t be taxed on expenses and recipients won’t be taxed on funds used for eligible expenses. The third foundation provides grants for tuition and supplies for college students based on need. Similarly, it won’t be taxed on the expenses and recipients won’t be taxed on funds spent on eligible expenses. (LTR 2002326023, 2002326024 and 202326025)
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