I am the administrator of a not-for-profit private school and our school librarian (volunteer) is paid a small stipend for operating the school library during scheduled student visit time. The stipend is a minimal amount and is given to the volunteer school librarian to assist in her paying for her son's school tuition. This amount is paid through our payroll system and is paid without anything taken out for taxes etc. At the end of the year the librarian is given a 1099 to declare the income from this stipend. The amount of the stipend is equal to or a little more than the cost of your son's total school expense. My question is... Are we (the school) violating any tax laws that would prevent us from paying our volunteer librarian this stipend? I know our HR department maintains the same required information on this person as they do on any other employee but we consider the librarian a volunteer that receives a stipend for helping at the school.