As a self-employed person, I assume that the IRS won't allow
me to 1) give my own child a scholarship and 2) write it off
as a business expense. But where do I find the rules about
this?
There are three ways I know of to do this, but none of them
sounds like what you are after.
One is for your daughter to be your employee, and her
education to be work-related. Then it's a business expense
for you and a working-condition fringe benefit for her.
If she's your employee, but her education isn't work
related, you can set up a qualified educational assistance
plan, a "Section 127" plan. This has strict
nondiscrimination rules that make it difficult to benefit
dependents.
The last is for you to be a bona fide institution of higher
education. Tuition breaks for dependents are an important
fringe benefit at many universities.
But it sounds like you are trying to color her tuition,
which is a personal expense, as a business expense, and
that's simply out of the question.