Ukraine Update: Crowdfunding's Key Role; IRS Notice on Employee-Leave Donations

Two recent news stories underline the importance of crowdfunding for supporting Ukraine and Ukrainians. The N.Y. Times reports that Ukrainian appeals to private individuals and companies have led to contributions of numerous items that have military applications, including drones, night vision scopes, body armor, rifles, and ammunition. The Chronicle of Philanthropy reports that the Ukrainian government is enhancing its crowdfunding efforts to keep support flowing even as the Russian invasion of Ukraine passes the three-month mark.

And even the incredibly busy IRS has taken the time to ease ways of supporting Ukraine. Notice 2022-28 provides guidance on how employers can adopt leave-based donation programs to aid citizens and residents or Ukraine, individuals presently in Ukraine, or refugees from Ukraine. Importantly it states:

Employer leave-based donation payments made by an employer before January 1, 2023, to section 170(c) organizations to aid victims of the further Russian invasion of Ukraine (qualified employer leave-based donation payments) will not be treated as gross income or wages (or compensation, as applicable) of the employees of the employer. Similarly, employees electing or with an opportunity to elect to forgo leave that funds the qualified employer leave-based donation payments will not be treated as having constructively received gross income or wages (or compensation, as applicable). 

Lloyd Mayer