Ulak

MEMORANDUM OPINION

This is an action for refund of federal taxes paid in the tax years 1964 and *1270 1965. The following facts are not disputed by the parties.

Plaintiff was employed by the County as a child welfare supervisor. In the year 1964, she was awarded educational stipends of $4,600.00 for the academic years 1964 and 1965, beginning in September of each year and ending in June of the following year. These stipends were awarded to plaintiff under programs established by the California Department of Social Welfare and the San Diego County Department of Public Welfare for study in social work at San Diego State College.

In August of 1964 and 1965, shortly prior to the beginning of each academic year, the plaintiff entered into contracts with the state department of social welfare and the county department of public welfare with respect to the terms of the aforesaid stipends. These contracts required plaintiff to continue in employment with the county in a public assistance program for at least one additional year upon completion of each academic year of training. The plaintiff also agreed to. repay the amounts received pursuant to the contracts in the event that she…