T HE OBJECTIVE of this paper is to set forth in as comprehensive a manner as possible the present status' of the law with respect to the taxability of scholarship and fellowship grants. It should be recognized at the outset that the issue is not one of infrequent occurrence. In fact, in spite of the avowed purpose of Congress in enacting section 117 of the Internal Revenue Code of 1954, which provides rules for determining the extent to which amounts received as scholarships and as fellowship grants are to be included in gross income,2 it has been stated that its enactment, rather than stabilizing the law and reducing controversies, has in fact resulted in an increase in disputes between the Commissioner and recipients of such awards. Professor Donald H. Gordon has stated that