Internal Revenue Service
Revenue Ruling
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smRev. Rul. 61-92
1961-1 C.B. 11
Sec. 74
Caution: Modified by Rev. Rul. 62-89
IRS Headnote
Under the revised Rockefeller Public Service Award Program, an award of $3,500 made to a selected civilian in the Federal Government, primarily in recognition of outstanding past accomplishments in public service, is excludable from the gross income of the recipient under section 74(b) of the Internal Revenue Code of 1954.
Revenue Ruling 57-50, C.B. 1957-1, 74, distinguished.
Full Text
Rev. Rul. 61-92
Advice has been requested whether a Rockefeller Public Service Award of $3,500 made to a selected civilian in the Federal Government, primarily in recognition of outstanding past accomplishments in public service, is excludable from gross income under section 74(b) of the Internal Revenue Code of 1954.
The Rockefeller Public Service Award Program was originally established in 1952 by a grant made to Princeton University and is administered by the University. It was designed to give special recognition to outstanding public service by civilians in the executive branch of the Federal Government and to establish incentives for the continuance and advancement of those in public service. The program was limited to Federal Government career employees whose performance has been distinguished by intellectual maturity, leadership, character, and competence, and who demonstrate a sincere interest in public service as a career. Individuals became candidates for the awards either by nomination by Government agencies or by direct application. These awards were intended to be sufficient to enable each recipient, at no financial sacrifice to himself, to spend 6 to 12 months in residence at an institution of the individual's choice, or in some comparable educational activity.
A new award program bearing the same name as the original out with a different emphasis on the award has been instituted by the University. Under the new program, primary emphasis is placed on past accomplishments. This is in contrast to the original program which placed primary emphasis on the future promise of the individual and his further training and development. In recognition of his past accomplishments, an award of $3,500 will be made to each Rockefeller Public Service Award grantee. Each recipient of an award under this new program may, but he is not required to, make available to others some of the knowledge his years of service have given him. This additional contribution may take the form of writing a book, the preparation and presentation of a series of articles or lectures, or pursuit of a research project which may involve periods of residence at one or more universities. An awardee who proceeds to make such a contribution will be eligible to receive a grant of additional funds in order that he may make his contribution at no financial sacrifice to himself.
Nominations for the award are limited to men and women employed by the Federal Government who have performed outstanding service. Any past or present Federal employee may nominate a candidate, other than himself or a member of his family, for such an award. A committee reviews the nominations and recommends to the trustees of the University the persons it considers best qualified to receive the awards.
Under the provisions of section 74(a) of the Code, gross income includes amounts received as prizes and awards. However, section 74(b) excludes from gross income those prizes and awards which are made primarily in recognition of religious, charitable, scientific, educational, artistic, literary, or civic achievements, but only if (1) the recipient was selected without any action on his part to enter the contest or proceeding; and (2) he is not required to render substantial future services as a condition to receiving the prize or award.
Revenue Ruling 57-50, C.B. 1957-1, 74, holds that an award received in 1954 under the original Rockefeller Public Service Award Program by an individual who was not a candidate for a degree is a fellowship grant subject to the provisions of section 117(b)(2) of the Code.
Awards made under the revised Rockefeller Public Service Award Program are distinguishable from awards under the original program in that they are made primarily in recognition of past achievements. Moreover, it is significant that under the existing program recipients of the awards are selected without any action on their part and are not required to render any substantial future services as a result of receiving the awards.
Accordingly, it is held that under the revised Rockefeller Public Service Award Program, an award of $3,500 made to a selected civilian in the Federal Government, primarily in recognition of outstanding past accomplishments in public service, is excludable from the gross income of the recipient under section 74(b) of the Code. However, the taxability to a recipient of an award of an additional grant for making available to others some of the knowledge his years of service have given him will depend upon the facts in the particular case.
Revenue Ruling 57-50, C.B. 1957-1, 74, distinguished.