http://maloneynovotny.org/news-resources/tax-tips/2014/tax-alerts-080414.html
https://www.law.cornell.edu/uscode/text/26/117
I’m still not finding what you are referring to. Section 117 is the controlling section. Section 119 doesn’t apply because the students are not employees according to the IRS. Everything I’m finding says athletic scholarships are treated like all other scholarships, exempt if used for QEE, taxable as unearned income if used for anything else. Publication 970 doesn’t instruct to treat them any differently than a merit or need based scholarship.
When the student signs the National Letter of intent, the form designates what amount or percentage is given for tuition, room and board, books. Each section can be 100%, but they aren’t all lumped together.
If you have any other information, I’d like it. I’ve searched “IRS and athletic scholarships” “IRS football scholarships” (because D1 football are headcount), ‘tax treatment of athletic scholarships’. ‘do football players pay tax on scholarships’ " IRS athletic scholarships" but nothing different comes up. I read Section 119 and don’t see athletic scholarship" My daughter’s money was included in her 1098T with all the other scholarships.
Honestly, if Pell grants used for breakfast are taxable, why wouldn’t football player’s breakfasts be taxable? Athletic scholarships are not refunded to students unless the school does not have dorms or a cafeteria, so all athletes would have their scholarships applied to required room and board.