Find Your Resource

In proposed regulations published June 9, 2003 (26 CFR Parts 1 and 14a, Reg 122917-02, June 9, 2003), the Internal Revenue Service proposed an update, reorganization, and elaboration of existing rules governing incentive stock options and employee stock purchase plans (ESPPs).

The IRS has issued a very useful compilation of requirements and procedures for correction programs when a qualified plan fails to abide by plan or ERISA requirements. The material is easy to navigate and provides considerable detail on each of the available correction programs.

On March 12, 2005, the IRS issued a correction to regulations issued in December designed to curb abuses of ESOPs in S corporations.

The Internal Revenue Service has issued examination guidelines for its agents to use when assessing ESOPs. There are no surprises in the guidelines, which, in any event, do not have regulatory force. They do, however, provide a good overview of basic ESOP procedures.

The IRS has issued final regulations on incentive stock option plans. The proposed regulations were published last year.

On August 30th, the IRS published final regulations disallowing deductions for the repurchase of ESOP shares (26 CFR, Part 1, TD 9282). The regulations were necessitated because of a Ninth Circuit Court of Appeals decision (Boise Cascade Corporation v.

The IRS has issued final regulations (T.D. 9088) governing the allocation of costs in developing intangibles related to stock options and other equity instruments in qualified cost sharing arrangements (QCSAs). QCSAs are procedures to allocate costs between U.S.

On December 27, 2006, the IRS issued final regulations for compliance with S ESOP corporation anti-abuse rules (TD9302). Generally, the final rules make only minor changes to the existing proposed regulations.

In Revenue Ruling 2003-6, the IRS has struck decisively at companies that want to use S corporation ESOPs to benefit a small number of people while providing insubstantial benefits to employees.

The IRS has now changed its position on pass-through voting of ESOP shares.