Ad: BlueJ Better Tax Answers. -Accomplish hours of research in seconds -Instantly draft high-quality communications -Verify answers using a library of trusted tax content. Learn more

IRS Provides Tax Relief for Rank-and-File Employees Affected by Backdated Stock Options

Irs_logo_355The IRS yesterday announced (IR-2007-30) that it will provide tax relief for rank-and-file employees affected by their companies’ issuance of backdated stock options.

If an employee exercised a backdated stock option in 2006, the employee may owe an additional 20% tax …. If the option had been properly priced, the employee normally would only have owed income tax on the difference between the value at the date of grant and exercise. The initiative, described in Announcement 2007-18, allows companies to step forward and pay the additional 20% tax and any interest tax that employees owe. The initiative does not permit the company to pay the additional tax for stock options exercised by its top executives or other insiders.

Press coverage:


About the Author

Ad: BlueJ Better Tax Answers. Blue J's generative AI tax research solution is transforming how tax experts work. Learn more.
Information and rates on advertising on TaxProf Blog