As a follow-up to our prior entry regarding Employee-Assistance Programs Available to Employers in the Wake of Hurricane Sandy, there have been two recent developments from the Internal Revenue Service of note:
(1) Notice 2012-69 addressed the treatment of certain amounts paid to Section 170(c) organizations under employer leave-based donation programs to aid victims of Hurricane Sandy. The IRS has stated that it will not assert that cash payments an employer makes to Section 170(c) organizations in exchange for vacation, sick, or personal leave that its employees elect to forgo constitute gross income or wages of the employees if the payments are made to the Section 170(c) organizations for the relief of victims of Hurricane Sandy and are paid before January 1, 2014. Similarly, the Service will not assert that the opportunity to make such an election results in constructive receipt of gross income or wages for employees. Employers who have adopted leave-sharing plans (or are considering their adoption) should take note of this development.