Charles L. Knapp and Beverley E. Knapp v. Commissioner of Internal Revenue

WINTER, Circuit Judge:

Appellants Charles and Beverley Knapp appeal from a decision of the Tax Court determining a deficiency in their federal income tax for the year 1979. The dispute concerns the taxability of payments made by Mr. Knapp’s employer, the New York University School of Law (“N.Y.U.”), to educational institutions attended by the Knapps’s children pursuant to a program in which N.Y.U. provided tuition assistance to the children of its faculty members. We hold that these payments did not fall within the scope of the exemption for scholarships provided in Section 117 of the Internal…