Thank you to all who responded to my question regarding a council member who declines their salary but desires this salary be donated to a local charity. The issue was whether this could be accomplished without affecting taxes, W-2's etc. One idea I had was to transfer the unspent salary funds to community promotions and then pay the charity. Of the 36 responses received, 11 indicated they do something similar and this would be OK. 15 respondents indicated this would not be OK. These 15 indicated that the wages would have to be reported and taxed and then the council member could made a contribution. Some of these respondents indicated it was taxable regardless of declining the salary and then making the donation because the council member directed the donation and therefore had "constructive receipt". Another 2 respondents said that making the donation in lieu of salary and outside of personal contribution, amounted to a gift of public funds and therefore would not be permitted. Another 6 respondents had other comments including that it was just a bad idea. Attached are the full comments of the 36 responses. Note that I have removed all references to the identities of those that responded. With 11 saying OK and 17 saying No for one reason or another, it may be that not everyone is handling this situation correctly and the last thing I would want is to provide a nice target list for the IRS identifying those in error. Thanks again to all. <<Payroll Donate salay question.doc>>
Payroll Donate salay question.doc
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