n-03-1.pdf

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Part III - Administrative, Procedural, and Miscellaneous

Treatment of Certain Amounts Paid to § 170(c) Organizations Under Employer Leave-
Based Donation Programs

Notice 2003-1

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.

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.

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

Notice 2001-69 is modified and superseded.

DRAFTING INFORMATION

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).