Two executives from Brocade Communications have been indicted on criminal charges for securities fraud for possible manipulation of stock options
, and the SEC has filed a civil complaint against the company.
Is adequate for companies that do not grant many stock options
The fair value method requires an issuer to recognize compensation for employee stock options
as employees perform services to earn those options.
2002-22 previously concluded that a taxpayer who transfers interests in nonstatutory stock options
and nonqualified deferred compensation to his or her former spouse incident to divorce need not include any gross income on the transfer.
Note: The IRS issued a Field Directive on March 14, 2003, which states that LMSB Employment Tax Specialists should not challenge the timeliness of employment and withholding tax deposits on the exercise of stock options
if the deposits are made the next day after settlement date, as long as that date is within three days of the trade date.
The IRS could audit your gift tax return at time of transfer, and valuation of compensatory stock options
has no real precedent in the tax law.
In December 2006, the company's board of directors created a special board committee of independent directors to conduct a voluntary review of past stock option
practices at the company.
But, the reports of the demise of stock options
have been greatly exaggerated.
Are you rethinking the whole idea of offering stock options
as an employee benefit?
ISOs and NQSOs are two types of commonly recognized stock options
2002-22 and Notice 2002-3 1 apply to some deferred compensation arrangements as well, this discussion will be limited to their application to stock options
In addition, while appreciating the extension of the period for optional reporting of compensation arising from the exercise of employer-provided nonqualified stock options
, we believe that Announcements are an improper means through which to impose a mandatory wage-information reporting requirement.