An employer paid an employee ("Jon") an $8,000 "commission" in addition to his regular salary. Throughout his employment, Jon was enrolled at a local university earning an undergraduate degree. He had a verbal agreement with his employer that he would be reimbursed for certain educational expenses he incurred. Jon did not report the $8,000 as taxable income because he considered it to be a nontaxable "educational grant." The IRS audited Jon, and determined that the entire $8,000 was taxable. Jon appealed, claiming that the $8,000 commission was not taxable on three separate grounds: (1) The commission was in reality a nontaxable qualified scholarship; (2) the commission represented employer-provided educational assistance; and (3) the commission represented an accountable reimbursement of a legitimate business expense (education). The Court rejected each of these arguments, and concluded that the commission was fully taxable.