Grants to Individuals

Department of the Treasury
Internal Revenue Service
Tax Exempt and Government Entities
IRS P.O. Box 2508
Cincinnati, OH 45201
Release Number: 202517021
Release Date: 4/25/2025
LEGEND
X number of scholarships y $ amount
Dear
Date:
01/30/2025
Taxpayer ID number:
Person to contact:
Name:
ID number:
Telephone:
UIL: 4945.04-04
You asked for advance approval of your scholarship procedures under Internal Revenue Code (IRC) Section 4945(g)(1 ). You requested approval of your scholarship program to fund the education of certain qualifying students.
This approval is required because IRC Section 4945 provides for the imposition of taxes on each taxable expenditure of a private foundation. IRC Section 4945( d)(3) provides that the term "taxable expenditure" includes any amount paid or incurred by a private foundation as a grant to an individual for travel, study, or similar purposes by the individual, unless the grant satisfies the advance approval requirement ofIRC Section 4945(g).
Our determination
We approved your procedures for awarding scholarships. Based on the information you submitted, and assuming you will conduct your program as proposed, we determined that your procedures for awarding scholarships meet the requirements of IRC Section 4945(g)( 1 ). As a result, expenditures you make under these procedures won1t be taxable.
Additionally, awards made under these procedures are scholarship or fellowship grants and are not taxable to the recipients if they use them for qualified tuition and related expenses ( suàject to the I imitations provided in IRC Section l l7(b)).
Description of your request
Your letter indicates you will provide educational scholarships, apprenticeships, and fellowships for individuals to pursue degrees, certifications, or similar credentials from accredited colleges, universities, and trade schools.
You will award approximately X educational scholarships each academic year, for y per scholarship.
You will publicize your program through advertisements in various media and announcements for your program are currently in development.
Applicants must be enrolled in an accredited US college/university/trade school or similar education institution or academy, and not be a dependent of any disqualified person with respect to you.
Letter4792 (Rev.1a2022)
Catalog Number 58263T
The selection committee, as appointed by your directors, will evaluate candidates based on the following criteria:
• Written application
• Transcripts of courses and grades
• Test scores
• Resume/CV of achievements, activities, and honors
• Financial need
• Personal challenges
• Potential for successfully attaining degree and for future success
• Letters of recommendation
Recipients must remain in good standing at their educational institution and maintain a minimum course load and GPA. You will require year end reports from either the recipients or their respective schools. If the terms of the grant are violated, funding may be terminated, and you will attempt to recover the funds.
Basis for our determination
IRC Section 4945 imposes excise taxes on the taxable expenditures of private foundations. A taxable expenditure is any amount a private foundation pays as a grant to an individual for travel, study, or other similar purposes.
However, a grant that meets all the following requirements ofIRC Section 4945(g) is not a taxable expenditure.
• The foundation awards the grant on an objective and nondiscriminatory basis.
• The IRS approves in advance the procedure for awarding the grant.
• The grant is a scholarship or fellowship subject to the provisions ofIRC Section 117(a).
• The grant is to be used for study at an educational organization described in IRC Section 170(b )(1 )(A)(ii).
Other conditions that apply to this determination
• This determination only covers the grant program described above. This approval will apply to succeeding grant programs only if their standards and procedures don't differ significantly from those described in your original request.
• This determination applies only to you. It may not be cited as a precedent.
• You cannot rely on the conclusions in this letter if the facts you provided have changed substantially.
You must report any significant changes to your program to the IRS at:
Internal Revenue Service
Exempt Organizations Determinations
TE/GE Stop 31 A Team 105
P.O. Box 12192
Covington, KY 41 012-0192
• You can't award grants to your creators, officers, directors, trustees, foundation managers, or members of selection committees or their relatives.
• All funds distributed to individuals must be made on a charitable basis and further the purposes of your organization. You cannot award grants for a purpose that is inconsistent with IRC Section 170( c )(2)(8).
• You should keep adequate records and case histories so that you can substantiate your grant distributions with the IRS if necessary.
Letter 4792 (Rev. 1-2022)
Catalog Number 58263T
We'll make this determination letter available for public inspection after deleting personally identifiable information, as required by IRC Section 6110. We've enclosed Letter 437, Notice oflntention to Disclose -Rulings, and a copy of the letter that shows our proposed deletions.
• If you disagree with our proposed deletions, follow the instructions in the Letter 437 on how to notify us.
• If you agree with our deletions, you don't need to take any further action.
We've sent a copy of this letter to your representative as indicated in your power of attorney.
Please keep a copy of this letter in your records.
If you have questions, you can contact the person shown at the top of this letter.
Enclosures:
Letter 437
Sincerely,
~ ,12_.. ~
Stephen A. Martin
Director, Exempt Organizations
Rulings and Agreements
Letter 4792 (Rev. 1-2022)
Catalog Number 58263T