Scholarship Rules Trap Congressman

United States Representative Eddie Bernice Johnson has admitted that the Congressional Black Caucus Foundation awarded scholarships to at least 23 of her relatives at her direction. This should serve as a reminder that IRS rules require all scholarship decision makers be independent of all applicants and recipients. This standard applies to all Section 501(c)(3) organizations that award scholarships. If your organization awards scholarships, it is time to review all the requirements to assure compliance the federal tax laws governing the award of scholarships.