Bingler v. Johnson

An employer let employees pursue a doctorate while continuing to work, then take a paid leave during which they received a salary-based stipend, kept their benefits and seniority, had to get their dissertation topic approved by the employer, filed regular progress reports, and had to return to work for the employer for at least two more years afterward. Johnson (plaintiff) participated and claimed the stipend was a tax-exempt scholarship under the Internal Revenue Code. The IRS denied the exemption; at trial the jury found the stipend taxable, but the Third Circuit reversed. The Supreme Court granted certiorari to resolve a circuit split.