The IRS released two notices today in response to the need for charitable and other relief due to the Ebola outbreak in Guinea, Liberia, and Sierra Leone.

Qualified Disaster Relief

In Notice 2014-65, the IRS designates the Ebola Virus Disease outbreak occurring in the West African countries of Guinea, Liberia, and Sierra Leone as a “qualified disaster” for purposes of Section 139.  Section 139 excludes from gross income amounts received by an individual as a “qualified disaster relief payment.”  In general, payments may not be qualified disaster relief payments if they are not paid in connection with a qualified disaster.

As a result of the designation of the Ebola outbreak as a qualified disaster for purposes of Section 139, payments that otherwise meet the requirements of qualified disaster relief to assist victims affected by the Ebola outbreak in the three countries are excludable from the recipients’ gross income.  The notice also states that employer-sponsored private foundations may choose to provide disaster relief to employee victims of the Ebola outbreak in those three countries, but cautions that such private foundations should exercise due diligence when providing disaster relief.

Leave-Based Donation Payments

Notice 2014-68 provides guidance on the treatment of leave-based donation programs to aid victims of the Ebola outbreak in 

Guinea, Liberia, and Sierra Leone for income and employment tax purposes.  Under such programs, employees may elect to forego vacation, sick, or personal leave in exchange for their employer making cash payments to a Section 170(c) organization.

First, the notice provides that the IRS will not assert that such cash payments constitute gross income or wages of the employees if the payments are:  (1) made to the Section 170(c) organizations for the relief of victims of the Ebola outbreak in Guinea, Liberia, and Sierra Leone; and (2) paid to the Section 170(c) organizations before January 1, 2016.  In this regard, the notice states that electing employees may not claim a charitable deduction under Section 170 with respect to such amounts excluded from their gross income.  Second, the notice provides that the IRS will not assert that the opportunity of an employee to make such an election results in constructive receipt of gross income or wages for employees.  Finally, the notice provides that the IRS will not assert that an employer will be permitted to deduct such cash payments only under the rules of Section 170 rather than the rules of Section 162.