The opinion of the court was delivered by: MILLER
In this action, tried before the court without a jury, the plaintiff, a physician, seeks to recover an alleged overpayment of income tax for the calendar year 1956. The only question presented is whether an amount paid to the plaintiff in that year by the University of Pittsburgh constituted a fellowship grant excludable from gross income under Section 117 of the Internal Revenue Code of 1954, 26 U.S.C.A. § 117, subject to the limitations of § 117(b)(2), or whether that amount represented compensation for services taxable under applicable Regulations. The facts are found specially in accordance with Rule 52, F.R.C.P. 28 U.S.C.A.
1. Harry F. Wrobleski, a Pittsburgh resident, was accepted on July 1, 1955, as a participating graduate physician in a training program in psychiatry at the Western State Psychiatric Institute and Clinic in the City of Pittsburgh.
2. While engaged in the training program in psychiatry during 1956, the plaintiff received a stipend of approximately $ 3,400 from the University of Pittsburgh.
3. On or before April 15, 1957, the plaintiff filed his individual income tax return for the year 1956 with the District Director at Pittsburgh. On his return, plaintiff claimed a refund of income tax in the amount of $ 488.40 which had been withheld by the University of Pittsburgh from the stipend paid him and remitted to the defendant.
4. Upon examination of the plaintiff's income tax return, the District Director notified him, on July 8, 1957, that the amount paid him by the University of Pittsburgh did not quality as a fellowship grant within the meaning of Section 117 of the Internal Revenue Code of 1954 but rather constituted compensation for services rendered since the plaintiff 'gave his skill and experience in consideration for monies received.'
5. The University of Pittsburgh is an organization within the description of organizations exempt from tax under Sections 501(a) and 501(c)(3) of the Internal Revenue Code of 1954.
6. The Western State Psychiatric Institute and Clinic, established by the Commonwealth of Pennsylvania and leased to the University of Pittsburgh for the sum of $ 1 a year, was designed to serve primarily as a center for research and education of students and specialists in the field of emotional illness and health. The use and some of the purposes of the Institute have been defined by statute which provides, in part, as follows:
'The Western State Psychiatric Institute and Clinic, located in Allegheny County, shall be used for study and research into the causes, treatment, prevention and cure of the various types of nervous disorders and mental diseases. This institute shall also provide training and teaching both at the undergraduate and at the graduate level of students who, upon graduation, will enter the practice of general medicine, with a technical background of training in mental illness, as well as for the purpose of taking up the great gap between the number of qualified psychiatrists and the number who are needed as a result of the constantly mounting number of persons needing attention for mental disorders.' 1949, May 20, P.L. 1643, § 1, 50 P.S.Pa. § 575.1.
7. Graduate physicians, graduate nurses, student nurses and medical students receive training in psychiatry at the Institute. Physicians, like the plaintiff, pursuing the training program in psychiatry are referred to by the Institute as fellows.
8. The fellows are not candidates for degrees and their object is to secure certification in Psychiatry by the American Board of Psychiatry and Neurology, Inc.
9. The training program in psychiatry for physicians continues for three years. During the program those physicians accepted for participation are required to devote their full time and attention to the program for its full duration and are not permitted to be employed by another institution or to engage in the private practice of medicine.
10. The program of study includes extensive classroom and seminar activity, supervised participation in the treatment of in-patients and out-patients, experience ...