Does a taxpayer who does not receive a Form W-2 for taxable scholarship income need to report that income?

A taxpayer should report taxable scholarship income even if they do not receive a Form W-2. Scholarships can be classified as a form of income, and it's important to understand that all income subject to federal tax, including taxable scholarships, must be reported on the taxpayer's return.

In terms of scholarships, certain amounts can be considered taxable, such as those used for expenses other than qualified tuition and fees. Therefore, regardless of whether a formal document like a W-2 or 1099 is received, the obligation to report the income still stands. The Internal Revenue Service (IRS) requires all income to be accurately declared, ensuring that all taxable portions of a scholarship are officially recognized.

The other options incorrectly suggest that the income does not need to be reported based on the absence of specific documents or under certain conditions, which does not align with the IRS rules about income reporting. Taxpayers have the responsibility to maintain transparency and accuracy in their tax filings, even in instances of informal income like scholarships.