IRS to Delay Companies’ Stock Options Tracking
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The Internal Revenue Service said it will delay requiring companies to track employee stock options after payroll managers complained they didn’t have enough time to comply.
The IRS said it gave all companies that distribute stock options until 2002 instead of 2001 to begin segregating that income from total wages on W-2 forms.
The agency still faces a challenge over whether it even has the authority to mandate the change, which it ordered in November without explanation.
Tax lawyers say the IRS and Treasury Department have been hinting they want to change laws that allow companies to deduct the amount employees gain when options are exercised.
That creates a situation where profit reports to shareholders--known as book values--are unchanged, but taxes are lowered, possibly allowing the laws to be used as a tax shelter.
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