102 STAT. 3350

PUBLIC LAW 100-647—NOV. 10, 1988

Fellowships and
scholarships.
Schools and
colleges.

Aliens.

(c) AMENDMENT RELATED TO SECTION 111 OF THE REFORM ACT.—
Paragraph (3) of section 32(i) of the 1986 Code is amended to read as
follows:

"(3) ROUNDING.—-If any dollar amount after being increased
under paragraph (1) is not a multiple of $10, such dollar amount
shall be rounded to the nearest multiple of $10 (or, if such dollar
amount is a multiple of $5, such dollar amount shall be in-
creased to the next higher multiple of $10)."

(d) AMENDMENTS RELATED TO SECTION 123 OF THE REFORM ACT.—

(1XA) Clause (ii) of section 4941(d)(2)(G) of the 1986 Code is
amended to read as follows:

"(ii) scholarships and fellowship grants which would
be subject to the provisions of section 117(a) (as in effect
on the day before the date of the enactment of the Tax
Reform Act of 1986) and are to be used for study at an
educational organization described in section
170(b)(lXAXii),".

(B) Paragraph (1) of section 4945(g) of the 1986 Code is
amended to read as follows:

"(1) the grant constitutes a scholarship or fellowship grant
which would be subject to the provisions of section 117(a) (as in
effect on the day before the date of the enactment of the Tax
Reform Act of 1986) and is to be used for study at an educational
organization described in section 170(b)(l)(A)(ii),".

(2XA) The second sentence of section 1441(b) of the 1986 Code
is amended to read as follows: "The items of income referred to
in subsection (a) from which tax shall be deducted and withheld
at the rate of 14 percent are amounts which are received by a
nonresident alien individual who is temporarily present in the
United States as a nonimmigrant under subparagraph (F), (J),
or (M) of section 101(a)(15) of the Immigration and Nationality
Act and which are—

"(1) incident to a qualified scholarship to which section 117(a)

applies, but only to the extent includible in gross income; or

"(2) in the case of an individual who is not a candidate for a

degree at an educational organization described in

170(b)(lXAXii), granted by—

"(A) an organization described in section 501(c)(3) which
is exempt from tax under section 501(a),
"(B) a foreign government,

"(C) an international organization, or a binational or
multinational educational and cultural foundation or
commission created or continued pursuant to the Mutual
Educational and Cultural Exchange Act of 1961, or

"(D) the United States, or an instrumentality or agency
thereof, or a State, or a possession of the United States,
or any political subdivision thereof, or the District of
Columbia,

as a scholarship or fellowship for study, training, or research in
the United States."

(B) Subsection (c) of section 871 of the 1986 Code is amended—

(i) by striking out "section 1441(bXD or (2)" and inserting

in lieu thereof "the second sentence of section 1441(b)"; and

(ii) by striking out "(F) or (J)" each place it appears and

inserting in lieu thereof "(F), (J), or (M)".