Guidance on Leave-Based Contributions Won't Be Extended

Guidance on Leave-Based Contributions Won't Be Extended

News story posted in IRS Notices on 12 December 2002| comments
audience: National Publication | last updated: 18 May 2011
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Summary

The IRS has announced (Notice 2003-1) that interim guidance on the tax treatment of employers' payments to charitable organizations under leave-based donation programs won't be extended to payments made after January 1, 2003. This notice modifies and supersedes Notice 2001-69, which provided that the IRS wouldn't treat the payments as gross income or wages to employees.

Notice 2003-1; 2003-2 IRB 1 (11 Dec 2002)

Full Text:

TREATMENT OF CERTAIN AMOUNTS PAID TO §170(C) ORGANIZATIONS UNDER EMPLOYER LEAVE-BASED DONATION PROGRAMS

Part III -- Administrative, Procedural, and Miscellaneous [1] This notice informs taxpayers that Notice 2001-69, 2001-2 C.B. 491, will not be extended to payments made on or after January 1, 2003.

[2] Notice 2001-69 provides interim guidance regarding the tax treatment of an employer's payment to an organization described in § 170(c) of the Internal Revenue Code, in exchange for vacation, sick, or personal leave that the employee elects to forgo ("leave-based donation payments"). Notice 2001-69 provides that, for leave-based donation payments an employer makes to a § 170(c) organization before January 1, 2003, the Service will not raise certain issues regarding the treatment of the payments as gross income or wages to employees, or the treatment of the deduction of the payments by employers.

[3] Notice 2001-69 also requested comments on whether the regulations under § 61 should be modified to except certain leave-based donation programs from the assignment of income doctrine. The Service and Treasury Department have reviewed the comments received and determined not to amend the regulations under § 61.

EFFECT ON OTHER DOCUMENTS

[4] Notice 2001-69 is modified and superseded.

DRAFTING INFORMATION

[5] The principal author of this notice is Sheldon A. Iskow of the Office of the Associate Chief Counsel (Income Tax and Accounting). For further information regarding this notice, please contact Mr. Iskow on (202) 622-4920 (not a toll-free call).

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