I would be concerned about the lack of a 1099.  Some government-funded health-related fellowships are tax exempt.  "You don't need to include in gross income any amounts you receive for services that are required by the National Health Service Corps Scholarship Program, the Armed Forces Health Professions Scholarship and Financial Assistance Program, or a comprehensive student work-learning-service program (as defined in section 448(e) of the Higher Education Act of 1965) operated by a work college."  On the other hand, the government is pretty good at sending out 1099's when required.  Has the taxpayer asked the program managers about it?  I'm sure others have had the same question.