It's good that you posted that, sohsie
I do realize that my initial answer was not technically nor legally correct (as I will go into later below).
I remember thinking through this exact issue 7 years ago when I started MSTP. Our stipend earnings were not reported to the IRS and a good number of us hadn't filed with the IRS prior to entering med school. Again, I am assuming (maybe it's not a correct assumption) that PSF earnings represent fellowship earnings similar to MSTP stipends. But who knows.
Anyways, back then, it was my understanding that filing taxes on stipend earnings was analogous to some sort of Honor System. Our earnings were not reported to the IRS and if we hadn't filed taxes, how would they know we were doing anything wrong? We would, in essence just coast below their radar. Plus, even if they caught onto us, would they pursue a poor medical/graduate student? It would be a waste of their money and resources which would be better spent chasing down big-time tax evaders. This was our thought process when my fellow MSTP classmates were discussing this with the tax advisors here on campus.
It was communicated to us that NOT filing taxes as such would still be associated with finite risk. I ended up filing starting from my first year of med school because a postdoc in a lab where I had done a research rotation had told me that at his grad school, several years back, a bunch of students had been audited and severely fined. This got me all paranoid and I just opted to simply pay my dues to the IRS. Now I'm kicking myself for doing so since one of my classmates did not file for the first few years in MSTP. To my knowledge, he hadn't been audited. Clearly, we were advised that if we chose to NOT pay taxes, we should start filing 3-4 years prior to finishing the MSTP. That way we get into the system and when we start filing as residents, the IRS isn't gonna say, "Waitaminute...this guy is 30 and he's filing for the first time??? Let's do some digging around to see why this is."
Anyways, I went through the whole thought process before and am aware of the tax rules you posted. And I ended up doing the honest thing and starting filing taxes right from the get-go (of course, my classmate tells me that I wussied out
). In the spirit of this post, however, I do retract my initial recommendations to the OP. The OP, to not risk getting fined, santioned, and castrated by the IRS for failing to pay his dues, should just go ahead and file taxes on his PSF earnings.