(I would like to note beforehand that I am not discussing the taxability of a scholarship or fellowship here. This is purely about finding the right category for some certainly taxable income, for example, for a researcher who is not a degree candidate. The category is important for stuff like tax withholding and tax treaties with foreign countries, where a scholarship/fellowship may be treated differently from wages in terms of tax rate, exemptions, limits, etc.)
I feel the following treatments of fellowship grants (from IRS Publication 515 and the IRS Instructions for Form 8233) are at least slightly contradictory:
A scholarship or fellowship grant is an amount given to an individual for study, training, or research, and which does not constitute compensation for personal services.
(IRS Publication 515, page 32, bottom of left column in pdf; or here in html)
However:
In general, scholarship or fellowship income is compensatory to the extent it represents payment for past, present, or future services (for example, teaching or research) performed by a nonresident alien as an employee and the performance of those services is a condition for receiving the scholarship or fellowship (or tuition reduction).
(IRS Instructions for Form 8233, page 2, top of right column in pdf; or here in html)
And in line with that:
Grants given to students, trainees, or researchers which require the performance of personal services as a necessary condition for disbursing the grant do not qualify as scholarship or fellowship grants. Instead, they are compensation for personal services considered to be wages. It does not matter what term is used to describe the grant (for example, stipend, scholarship, fellowship, etc.).
(IRS Publication 515, page 33, middle of left column in pdf; or here in html)
My premise is that any research fellowship requires the grantee to carry out research; I have not come across any fellowship "for research" so far that does not require the performance of (past, present, but mostly future) "research", but lets the grantee do whatever they like with the money.
So why does IRS Publication 515 mention fellowship grants for research, when effectively the requirement to do research disqualifies the grant as a fellowship grant?
For Fulbright Grants, I have found the following answer, but I wonder if this ruling still applies today, and whether it applies to similar types of grants as well:
Thus, if the proceeds of a Fulbright grant were paid to enable the Fulbright grantee to perform study, training, or research abroad mostly for his/her own benefit, then such grant constitutes scholarship/fellowship income. On the other hand, if the proceeds of the Fulbright grant were paid as compensation for lecturing or teaching abroad, then the grant is compensation for personal services and is usually considered to be wages.
Edit: I was interested in the history of the statement in the Instructions for Form 8233; here it is:
1996:
Any part of a scholarship, fellowship, or grant paid for past, present, or future services to the institution paying the grant or fellowship is compensation for personal services.
The phrase has then been changed to the one cited above in 2001, and has not been changed in 2005 or 2009; 2011 is the most recent version. So the phrase in question is at least 15 years old, if that changes anything.
Edit 2: I try to clarify my question with regard to @littleadv's answer. From the title:
Is a fellowship grant for research automatically "for personal services", and thus wages?
Initially, my interpretation of Publication 515, in conjunction with the Instructions for Form 8233 and my premise, let me conclude that a research fellowship is always compensatory because some kind of service (namely, research -- the example research is explicitly being given in the Instructions for Form 8233) is always required. @littleadv has answered that research is not necessarily a service; so I wonder what kind of research would be considered a service (again, the example research is explicitly being given in the Instructions for Form 8233, so there should be one).
