Interesting article in today’s Daily Business Review:  After the Backdating Investigation, Don’t Forget About the Taxes, by Tracy Nichols:

You thought the misery was over when the hordes of lawyers and accountants cleared out after completing the option backdating investigation into your company’s options grant practices for the last 10 years. …

Since the Securities and Exchange Commission has publicly stated that it is sharing the results of its investigations with the Department of Justice and the Internal Revenue Service, it is probably advisable to unravel the tax issues — just as you did with the accounting and legal issues previously.

There are a variety of tax issues for companies and employees alike. These issues apply regardless of whether the options were the product of nefarious backdating — for example, intentionally altering the grant date of an option to a time when the stock price was lower than the actual grant date — or just innocent misdating. For example, you tried to get the date right but the necessary corporate actions did not occur until several weeks later when the price was, unfortunately, higher.