Internal revenue code incentive stock options

By: antyanesko Date: 26.05.2017

This document contains final regulations relating to statutory options. These final regulations affect certain taxpayers who participate in the transfer of stock pursuant to the exercise of incentive stock options and the exercise of options granted pursuant to an employee stock purchase plan statutory options.

These regulations provide guidance to assist these taxpayers in complying with the law in addition to clarifying rules regarding statutory options. These regulations are effective on August 3, Concerning the regulations, please contact Erinn Madden at not a toll-free number. Responses to this collection of information are required to assist taxpayers with the completion of their income tax returns for the taxable year in which a disposition of statutory option stock occurs.

An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid control number assigned by the Office of Management and Budget. The estimated annual burden per respondent varies from 15 minutes to 25 minutes, depending on individual circumstances, with an estimated average of 20 minutes.

Comments concerning the accuracy of this burden estimate and suggestions for reducing this burden should be sent to the Internal Revenue Service, Attn: IRS Reports Clearance Officer, SE: SP, Washington, DC , and to the Office of Management and Budget, Attn: Desk Officer for the Department of the Treasury, Office of Information and Regulatory Affairs, Washington, DC Books or records relating to this collection of information must be retained as long as their contents may become material in the administration of any internal revenue law.

Generally, tax returns and tax return information are confidential, as required by 26 U. This document contains amendments to 26 CFR part 1 under sections , , and of the Internal Revenue Code Code. Changes to the applicable tax law concerning section were made by sections and of the Omnibus Budget Reconciliation Act of OBRA 90 , Public Law Stat. Changes to the applicable tax law concerning section were made by section of the Technical and Miscellaneous Revenue Act of TAMRA , Public Law Stat.

Changes concerning section were made by section of the Economic Recovery Tax Act of , Public Law 95 Stat. Related changes to section A were made by section j of the Technical Corrections Act of , Public Law 96 Stat. Regulations under section governing the requirements for restricted stock options and qualified stock options, as well as options granted under an employee stock purchase plan, were published in the Federal Register on December 9, T.

Temporary regulations under section A providing guidance and transitional rules related to incentive stock options were published in the Federal Register on December 17, T. Final regulations under section related to stockholder approval were published in the Federal Register on December 1, T. Regulations under section were published in the Federal Register on June 23, T. Proposed changes to the final regulations under sections , , and and proposed regulations under section A were previously published in the Federal Register at 49 FR LR, C.

With the exception of certain stockholder approval rules, the proposed regulations provided a comprehensive set of rules under section of the Code. The proposed regulations and the temporary regulations have been withdrawn.

See 68 FR On June 9, , a notice of proposed rulemaking REG, I. No hearing concerning the proposed regulations was held; however, the IRS received written and electronic comments responding to this notice. After consideration of these comments, the proposed regulations are adopted as amended by this Treasury decision. The significant revisions are discussed below.

In general, the income tax treatment of the grant of an option to purchase stock in connection with the performance of services and of the transfer of stock pursuant to the exercise of such option is determined under section 83 of the Code and the regulations thereunder.

However, section of the Code provides special rules for determining the income tax treatment of the transfer of shares of stock pursuant to the exercise of an option if the requirements of section a or a , as applicable, are met. Section applies to incentive stock options, and section applies to options granted under an employee stock purchase plan collectively, statutory options.

Under section , if a share of stock is transferred to an individual pursuant to the exercise of a statutory option, there is no income at the time of exercise of the option with respect to such transfer, and no deduction under section is allowed to the employer corporation with respect to such transfer. However, pursuant to section 56 b 3 , section does not apply with respect to the exercise of an incentive stock option for purposes of the individual alternative minimum tax. Section a of the Code provides that section applies to the transfer of stock to an individual pursuant to the exercise of an incentive stock option if i no disposition of the share is made within 2 years from the date of grant of the option or within 1 year from the date of transfer of the share, and ii at all times during the period beginning on the date of grant and ending on the day 3 months before the exercise of the option, the individual is an employee of either the corporation granting the option or a parent or subsidiary of such corporation, or a corporation or a parent or subsidiary of such corporation issuing or assuming a stock option in a transaction to which section a applies.

Section b provides several requirements that must be met for an option to qualify as an incentive stock option. Section of the Code provides special rules applicable to statutory options, including rules concerning the modification of statutory options and the substitution or assumption of an option by reason of a corporate merger, consolidation, acquisition of property or stock, separation, reorganization, or liquidation.

Section also contains definitions of certain terms, including disposition , parent corporation , and subsidiary corporation. Finally, section provides special rules related to attribution of stock ownership and the effect of stockholder approval on the date of grant of a statutory option. These final regulations provide comprehensive rules governing incentive stock options that, as did the proposed regulations, incorporate many of the rules contained in the proposed regulations.

However, the proposed regulations are re-numbered, and these final regulations adopt that reorganization. Sections and provide that a statutory option may be granted to an individual who is an employee of the corporation granting the option, a parent or subsidiary of such corporation, or a corporation or a parent or subsidiary of such corporation issuing or assuming a stock option in a transaction to which section a applies. The proposed regulations provide that an option is a statutory option only if, at the time the option is granted, the optionee is an employee of the corporation granting the option or a related corporation of such corporation.

Commentors requested clarification in the final regulations concerning whether the right to reemployment must be absolute and whether the right to reemployment provided by the Family Medical Leave Act or the Uniformed Services Employment and Reemployment Rights Act satisfies the requirements of this section.

These final regulations provide that the right to reemployment must be provided by statute or contract. Thus, for example, if an optionee is on leave pursuant to the Family Medical Leave Act, the Uniformed Services Employment and Reemployment Rights Act, or any similar statute providing for continued employment rights for an extended period of time, the employment relationship is considered intact. The effects of a disqualifying disposition are determined under section 83 a.

Thus, in the taxable year in which the disqualifying disposition occurs, the individual must recognize compensation income equal to the fair market value of the stock determined without regard to any lapse restriction and without regard to any reduction for any brokerage fees or other costs paid in connection with the disposition on the date the stock is substantially vested less the exercise price. See section c 2 concerning special rules that are applicable where the amount realized in a disposition is less than this difference.

In this example, the amount of compensation income is based on the fair market value of the stock on the date of exercise less the exercise price, and the section a 1 holding period is based on the date of exercise. This example retains the same holding period for the receipt of nonvested stock, but computes the amount of compensation income based on the date of vesting of the underlying stock rather than the date of exercise.

Several commentors suggested that if the option is exercised for nonvested stock the compensation income should not be calculated on the date of vesting because section 83 does not apply to a transaction to which section applies and section b applies to a disqualifying disposition.

Instead, the compensation income should be computed on the date of exercise. Alternatively, if the proposed rule is retained, commentors suggest that the final regulations and examples provide that an optionee may make a protective section 83 b election on exercise of the option. Specifically, Example 2 indicates that pursuant to section 83 e 1 of the Code, section 83 does not apply to a transaction to which section applies.

Thus, on exercise of a statutory option section 83 does not apply, and an optionee cannot make an effective election under section 83 b for purposes of the income tax consequences on the date of exercise. However, an effective election under section 83 b may be made for purposes of the alternative minimum tax, which calculates income as if section 83 applies.

Example 2 also illustrates that on a disqualifying disposition, the rules of section 83 and the regulations thereunder rather than section and the regulations thereunder are used to determine the amount of compensation includible in income. Applying the rules under section 83 a , the amount of compensation includible is the difference between the fair market value of the stock on the date the substantial risk of forfeiture lapses less the fair market value on the date of exercise.

Thus, the holding period for the transfer of the stock for purposes of section and the holding period requirements begins on the date of exercise rather than the date of vesting. However, in the event of a disqualifying disposition, the amount of capital gain if any and the holding period for purposes of determining capital gain is computed from the date of vesting. Among other requirements, to qualify as an incentive stock option, the option must be granted pursuant to a plan which is approved by the stockholders of the granting corporation within 12 months before or after the date the plan is adopted.

These final regulations retain the rules contained in the proposed regulations concerning shareholder approval. The companies combine to form one corporation that will be named Y, the plan will be continued by Y, and future grants under the plan will be made by Y the new combined entity. The consolidation agreement describes the plan, including the maximum aggregate number of shares available for issuance pursuant to incentive stock options under the plan after the consolidation and the employees eligible to receive options under the plan.

Section b 1 provides that an incentive stock option must be granted pursuant to a plan that includes the aggregate number of shares which may be issued under options. In response to comments, these final regulations provide that the plan must designate the maximum aggregate number of shares that may be issued under the plan through incentive stock options.

Thus, for example, if a corporation maintains an omnibus plan under which incentive stock options, nonstatutory options, and other stock-based awards may be made, the plan must contain a maximum number of shares that may be issued as incentive stock options under the plan.

Such a number may be expressed as a limit specific to incentive stock options or as a limit on all awards under the plan, including incentive stock options.

These final regulations do not require the plan to include the maximum number of shares that may be issued pursuant to nonstatutory options or other stock-based awards. Commentators also asked whether the maximum aggregate number of shares that may be issued under an incentive stock option plan is affected by the use of outstanding shares used to exercise an option. Under these final regulations, only the net number of shares that are issued pursuant to the exercise of a statutory option are counted against the maximum aggregate number of shares.

For example, if the exercise price of an option to purchase shares equals the value of 20 shares, and the corporation permits the employee to use those 20 of the shares to pay the exercise price of the option, and the corporation only issues 80 shares to the optionee, then 80 shares are counted against the maximum aggregate number of shares rather than Under section b 4 , the option price of an incentive stock option must not be less than the fair market value of the stock at the time the option is granted.

Taxpayers are required to retain adequate books and records to demonstrate that the option price requirements are satisfied.

Because of concerns that the value determined under these approaches may not reliably reflect the fair market value of the stock on the date of grant, these final regulations retain the rules described in the proposed regulations.

Under section d 2 , options are taken into account in the order in which they are granted. Section d 3 provides that the fair market value of stock is determined at the time the option is granted. Commentors suggested that the final regulations permit an individual to cancel, modify, or transfer an option at any time prior to the date of exercise rather than the year it first becomes exercisable.

Section h 1 provides that if the terms of an option are modified, extended, or renewed, such modification, renewal, or extension is treated as the grant of a new option. Under section h 3 , the term modification with certain exceptions means any change in the terms of an option which gives the optionee additional benefits under the option.

One exception to this definition is that a change in the terms of an option attributable to a substitution or an assumption that meets the requirements of section a is not a modification of an option. These final regulations retain most of the rules contained in the proposed regulations, with certain changes.

Incentive Stock Options (ISOs) | Startup Law Blog

Under the proposed regulations, a corporate transaction is i a corporate merger, consolidation, acquisition of property or stock, separation, reorganization, or liquidation; ii a distribution excluding ordinary dividends , or change in the terms or number of outstanding shares of such corporation, such as a stock split or stock dividend a change in capital structure ; iii a change in the name of a corporation whose stock is purchasable under the old option; and iv such other corporate events as may be prescribed by the Commissioner in published guidance.

The proposed regulations also provide that a new or assumed option must otherwise qualify as a statutory option. Thus, under the proposed regulations, for example, the new option must be substituted, or the old option must be assumed, under a plan approved by the stockholders of the corporation substituting or assuming the option.

In the ruling, the IRS indicated that approval of the persons who owned stock of the granting corporation at the time the plan originally was approved was sufficient to satisfy the stockholder approval requirements. In response to comments, these final regulations refrain from imposing an additional stockholder approval requirement for statutory options that have been granted and are outstanding at the time of a corporate transaction. E, an employee of X, holds outstanding incentive stock options to acquire X stock on exercise of the options.

If Corporation Y acquires X and substitutes new options to acquire Y stock for the old options to acquire X stock held by E, the substitution of the new Y options does not require new stockholder approval. The result is the same if the options are assumed by Y. However, for future options granted under the plan to qualify as incentive stock options, the plan must be approved by the Y shareholders.

Finally, commentors requested guidance concerning the treatment of earn-out payments received by option holders in connection with a corporate transaction.

Because of the factual nature of these transactions, these final regulations do not address the issues raised by these transactions. Section h 3 provides that a modification is any change in the terms of an option which gives the optionee additional benefits under the option, with certain specified exceptions.

Additionally, the exercise of such discretion is a modification of the option. Although several commentors suggested that the final regulations provide that the later exercise of the discretion is not a modification of the option, these final regulations retain the rule contained in the proposed regulations.

26 U.S. Code § - Incentive stock options | US Law | LII / Legal Information Institute

However, as under the proposed regulations, it is not a modification for the granting corporation to exercise discretion specifically reserved under an option related to the payment of a bonus at the time of the exercise of the option, the availability of a loan at exercise, or the right to tender previously-owned stock for the stock purchasable under the option.

A change to an option adding such discretion, however, is a modification. Commentors suggested broadening this rule to include the exercise of any reserved discretion under the option.

The proposed regulations also provide that an option is not modified merely because an optionee is offered a change in the terms of the option if the change is not made. These final regulations retain this rule, but also provide that if an offer to change the terms of the option remains outstanding for less than 30 days, the option is not modified. However, if the offer to change the terms of the option remains outstanding for 30 days or more, the option is treated as modified as of the date the offer to change the terms of the option is made.

Finally, commentors suggested that these final regulations provide an exception to the modification rule for an inadvertent change to a statutory option where the change is promptly reversed. In response, these final regulations provide that any inadvertent modification of an option is not treated as a modification to the extent the modification is reversed by the earlier of the date the option is exercised or the last day of the calendar year during which such change occurred.

These final regulations provide that the furnishing of statements in electronic form is permitted, provided the recipient consents to that means of delivery.

These final regulations are effective on August 3, However, these final regulations provide special transitional and reliance rules. For statutory options granted on or before June 9, , taxpayers may rely on the proposed regulations LR, 49 FR , the proposed regulations REG, 68 FR , or these final regulations until the earlier of January 1, , or the first regularly scheduled stockholders meeting of the granting corporation occurring 6 months after August 3, For statutory options granted after June 9, , and before the earlier of January 1, , or the first regularly scheduled stockholders meeting of the granting corporation occurring at least 6 months after August 3, , taxpayers may rely on either the REG or the final regulations.

Taxpayers may not rely on LR or REG after December 31, Reliance on LR, REG, or the final regulations must be in its entirety, and all statutory options granted during the reliance period must be treated consistently. It has been determined that these regulations are not a significant regulatory action as defined in Executive Order Therefore, a regulatory assessment is not required.

It is hereby certified that the collection of information in these regulations will not have a significant economic impact on a substantial number of small entities. Therefore, an analysis under the Regulatory Flexibility Act 5 U.

Pursuant to section f of the Code, the notice of proposed rulemaking preceding these final regulations is being submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact on small business.

The authority citation for part 1 continues to read in part as follows:. Removing the last sentence of paragraph a 1 and adding two sentences in its place. In the list below, for each section indicated in the left column, remove the language in the middle column and add the language in the right column:. Revising the last sentence of paragraph b 3 ii Example 1.

Incentive stock option - Wikipedia

Removing the last sentence of paragraph b 3 ii Example 2 , and adding two sentences in its place. Removing the first sentence of paragraph c 1 and adding two new sentences in its place. The term option includes a warrant that meets the requirements of this paragraph a 1. A pledge of the stock purchasable under an option as security for a loan that is used to pay the option price does not cause the option to violate the nontransferability requirements of this paragraph b.

Also, the transfer of an option to a trust does not disqualify the option as a statutory option if, under section and applicable State law, the individual is considered the sole beneficial owner of the option while it is held in the trust. If an option is transferred incident to divorce within the meaning of section or pursuant to a domestic relations order, the option does not qualify as a statutory option as of the day of such transfer. A corporate action constituting an offer of stock for sale is not considered complete until the date on which the maximum number of shares that can be purchased under the option and the minimum option price are fixed or determinable.

Except as otherwise provided, the term includes both treasury stock and stock of original issue. Special classes of stock authorized to be issued to and held by employees are within the scope of the term stock as used in such sections, provided such stock otherwise possesses the rights and characteristics of capital stock. Generally, stock which does not possess a general voting power, and may vote only on particular questions, is not voting stock.

However, if such stock is entitled to vote on whether a stock option plan may be adopted, it is voting stock. The term option price does not include any amounts paid as interest under a deferred payment arrangement or treated as interest. For example, a corporation for purposes of the preceding sentence includes an S corporation as defined in section , a foreign corporation as defined in section a 5 , and a limited liability company that is treated as a corporation for all Federal tax purposes.

For statutory options granted on or before June 9, , taxpayers may rely on the proposed regulations LR 49 FR , the proposed regulations REG 68 FR , or this section until the earlier of January 1, , or the first regularly scheduled stockholders meeting of the granting corporation occurring 6 months after August 3, For statutory options granted after June 9, , and before the earlier of January 1, , or the first regularly scheduled stockholders meeting of the granting corporation occurring at least 6 months after August 3, , taxpayers may rely on either the REG or this section.

Reliance on LR, REG, or this section must be in its entirety, and all statutory options granted during the reliance period must be treated consistently. Removing paragraph c 4 i and redesignating paragraphs c 4 ii through c 4 iv as paragraphs c 4 i through c 4 iii , respectively. Removing Example 1 in newly designated paragraph c 4 iii and redesignating Examples 2 through 5 as Examples 1 through 4 , respectively. See section 83 a to determine the amount includible on a disqualifying disposition.

The income attributable to such transfer determined without reduction for any brokerage fees or other costs paid in connection with the disposition is treated by the individual as compensation income received in the taxable year in which such disqualifying disposition occurs. No amount is treated as income, and no amount is allowed as a deduction, for any taxable year other than the taxable year in which the disqualifying disposition occurs.

If the amount realized on the disposition exceeds or is less than the sum of the amount paid for the share and the amount of compensation income recognized as a result of such disposition, the extent to which the difference is treated as gain or loss is determined under the rules of section or , as applicable.

Under paragraph b 1 i of this section, A therefore made a disqualifying disposition of the stock. Thus, paragraph a of this section is inapplicable to the transfer of the shares, and A must include the compensation income attributable to the transfer of the shares in gross income in the year of the disqualifying disposition. Y Corporation grants an incentive stock option for shares of its stock to E, an employee of Y.

Under paragraph b 1 i of this section, A made a disqualifying disposition of the stock. Thus, paragraph a of this section is inapplicable to the transfer of the shares, and E must include the compensation income attributable to the transfer of the shares in gross income in the year of the disqualifying disposition. Similarly, a subsequent transfer by the executor, administrator, heir, or legatee is not a disqualifying disposition by the decedent.

If a statutory option is exercised by the estate of the optionee or by a person who acquired the option by bequest or inheritance or by reason of the death of such optionee, see paragraph c of this section. If a statutory option is exercised by the individual to whom the option was granted and the individual dies before the expiration of the holding periods, see paragraph d of this section.

Consequently, neither the estate nor such person is required to include any amount in gross income as a result of a transfer of stock pursuant to the exercise of the option. Additionally, paragraph a of this section does not apply if the option is exercised by a person other than the executor or administrator, or other than a person who acquired the option by bequest or inheritance or by reason of the death of such deceased individual.

For example, if the option is sold by the estate, paragraph a of this section does not apply to the transfer of stock pursuant to an exercise of the option by the buyer, but if the option is distributed by the administrator to an heir as part of the estate, paragraph a of this section applies to the transfer of stock pursuant to an exercise of the option by such heir.

A The individual makes no disposition of such share before the later of the expiration of the 2-year period from the date of grant of the option pursuant to which such share was transferred, or the expiration of the 1-year period from the date of transfer of such share to the individual; and. See section c 3. For example, if the trustee transfers the share to a creditor in an insolvency proceeding, capital gain or loss must be recognized by the insolvent individual to the extent of the difference between the amount realized from such transfer and the adjusted basis of such share.

Similarly, if the trustee or other fiduciary transfers the share back to the insolvent individual, any subsequent transfer of the share by such individual which is not made in respect of the insolvency proceeding may be a disposition of the share for purposes of this paragraph a. The special rule described in paragraph b 2 i of this section does not apply if the disposition is a sale or exchange with respect to which a loss if sustained would not be recognized by the individual.

The following examples illustrate the principles of this paragraph b:. Disqualifying disposition of vested stock. On June 1, , X Corporation grants an incentive stock option to A, an employee of X Corporation, entitling A to purchase one share of X Corporation stock. On August 1, , A exercises the option, and the share of X Corporation stock is transferred to A on that date.

The share transferred to A is transferable and not subject to a substantial risk of forfeiture. Disqualifying disposition of unvested stock. Assume the same facts as in Example 1 , except that the share of X Corporation stock received by A is subject to a substantial risk of forfeiture and not transferable for a period of six months after such exercise. Because section 83 does not apply for ordinary income tax purposes on the date of exercise, A cannot make an effective section 83 b election at that time although such an election is permissible for alternative minimum tax purposes.

Because under section a a loss if it were sustained on the sale would not be recognized on the sale, under paragraph b 2 ii of this section, the special rule described in paragraph b 2 i of this section does not apply.

A recognizes no capital gain or loss on the transaction. Under paragraph b 2 i of this section, A is not required to include any amount in gross income as compensation attributable to the exercise of the option. The term incentive stock option means an option that meets the requirements of paragraph a 2 of this section on the date of grant. An incentive stock option may contain a number of permissible provisions that do not affect the status of the option as an incentive stock option. In addition, the option must meet all of the following requirements—.

If the terms of an option that has lost its status as an incentive stock option are subsequently changed with the intent to re-qualify the option as an incentive stock option, such change results in the grant of a new option on the date of the change. If the terms of an option, when granted, provide that it will not be treated as an incentive stock option, such option is not treated as an incentive stock option. An incentive stock option must be granted pursuant to a plan that meets the requirements of this paragraph b.

The authority to grant other stock options or other stock-based awards pursuant to the plan, where the exercise of such other options or awards does not affect the exercise of incentive stock options granted pursuant to the plan, does not disqualify such incentive stock options.

The plan must be in writing or electronic form, provided that such writing or electronic form is adequate to establish the terms of the plan. Any increase in the maximum aggregate number of shares that may be issued under the plan other than an increase merely reflecting a change in the number of outstanding shares, such as a stock dividend or stock split , or change in the designation of the employees or class or classes of employees eligible to receive options under the plan is considered the adoption of a new plan requiring stockholder approval within the prescribed month period.

In addition, a change in the granting corporation or the stock available for purchase or award under the plan is considered the adoption of a new plan requiring new stockholder approval within the prescribed month period.

Any other changes in the terms of an incentive stock option plan are not considered the adoption of a new plan and, thus, do not require stockholder approval. If nonstatutory options or other stock-based awards may be granted, the plan may separately designate terms for each type of option or other stock-based awards and designate the maximum number of shares that may be issued under such option or other stock-based awards.

Unless otherwise specified, all terms of the plan apply to all options and other stock-based awards that may be granted under the plan. However, the maximum aggregate number of shares that may be issued under the plan may be stated in terms of a percentage of the authorized, issued, or outstanding shares at the date of the adoption of the plan.

The plan may specify that the maximum aggregate number of shares available for grants under the plan may increase annually by a specified percentage of the authorized, issued, or outstanding shares at the date of the adoption of the plan.

A plan which provides that the maximum aggregate number of shares that may be issued as incentive stock options under the plan may change based on any other specified circumstances satisfies the requirements of this paragraph b 3 only if the stockholders approve an immediately determinable maximum aggregate number of shares that may be issued under the plan in any event. A separate maximum aggregate number of shares available for issuance pursuant to incentive stock options must be approved for each plan.

The plan described in this paragraph b , as adopted and approved, must indicate the employees or class or classes of employees eligible to receive the options or other stock-based awards to be granted under the plan.

This requirement is satisfied by a general designation of the employees or the class or classes of employees eligible to receive options or other stock-based awards under the plan.

This requirement is considered satisfied even though the board of directors, another group, or an individual is given the authority to select the particular employees who are to receive options or other stock-based awards from a described class and to determine the number of shares to be optioned or granted to each such employee.

If individuals other than employees may be granted options or other stock-based awards under the plan, the plan must separately designate the employees or classes of employees eligible to receive incentive stock options. An option on stock available for purchase or grant under the plan is treated as having been granted pursuant to a plan even if the terms of the option conflict with the terms of the plan, unless such option is granted to an employee who is ineligible to receive options under the plan, options have been granted on stock in excess of the aggregate number of shares which may be issued under the plan, or the option provides otherwise.

On January 1, , S adopts a plan under which incentive stock options for S stock are granted to S employees. Assume further that the plan was approved by the stockholders of S in this case, P on March 1, On January 1, , S changes the plan to provide that incentive stock options for P stock will be granted to S employees under the plan.

Because there is a change in the stock available for grant under the plan, the change is considered the adoption of a new plan that must be approved by the stockholders of P within 12 months before or after January 1, Thereafter, S continues to grant options for S stock to S employees under the plan. Assume further that after P disposes of its interest in S, S changes the plan to provide for the grant of options for S stock to S employees.

Because there is a change in the stock available for purchase or grant under the plan, under paragraph b 2 iii of this section, the stockholders of S must approve the plan within 12 months before or after the change to the plan to meet the stockholder approval requirements of paragraph b of this section.

Corporation Y does not maintain an incentive stock option plan. On May 15, , Corporation X and Corporation Y consolidate under state law to form one corporation. The new corporation will be named Corporation Y.

The consolidation agreement describes the Corporation X plan, including the maximum aggregate number of shares available for issuance pursuant to incentive stock options after the consolidation and the employees eligible to receive options under the plan. Additionally, the consolidation agreement states that the plan will be continued by Corporation Y after the consolidation and incentive stock options will be issued by Corporation Y.

The consolidation agreement is unanimously approved by the shareholders of Corporations X and Y on May 1, Corporation Y assumes the plan formerly maintained by Corporation X and continues to grant options under the plan to all eligible employees. Because the plan is fully described in the consolidation agreement, including the maximum aggregate number of shares available for issuance pursuant to incentive stock options and employees eligible to receive options under the plan, the approval of the consolidation agreement by the shareholders constitutes approval of the plan.

Thus, the shareholder approval of the consolidation agreement satisfies the shareholder approval requirements of paragraph b 2 of this section, and the plan is considered to be adopted by Corporation Y and approved by its shareholders on May 1, Maximum aggregate number of shares. X Corporation maintains a plan under which statutory options and nonstatutory options may be granted. The plan designates the number of shares that may be used for incentive stock options. Because the maximum aggregate number of shares that will be used for incentive stock options is designated in the plan, the requirements of paragraph b 3 of this section are satisfied.

Y Corporation adopts an incentive stock option plan on November 1, On that date, there are two million outstanding shares of Y Corporation stock. Because the maximum aggregate number of shares that may be issued under the plan is designated in the plan, the requirements of paragraph b 3 of this section are met.

The plan provides that the maximum aggregate number of shares available for issuance under the plan is 50,, increased on each anniversary date of the adoption of the plan by 5 percent of the then-outstanding shares.

Because the maximum aggregate number of shares that may be issued under the plan is designated as the lesser of one of two numbers, one of which provides an immediately determinable maximum aggregate number of shares that may be issued under the plan in any event, the requirements of paragraph b 3 of this section are met.

An incentive stock option must be granted within 10 years from the date that the plan under which it is granted is adopted or the date such plan is approved by the stockholders, whichever is earlier.

To grant incentive stock options after the expiration of the year period, a new plan must be adopted and approved. An incentive stock option, by its terms, must not be exercisable after the expiration of 10 years from the date such option is granted, or 5 years from the date such option is granted to an employee described in paragraph f of this section.

An option that does not contain such a provision when granted is not an incentive stock option. Whether there was a good-faith attempt to set the option price at not less than the fair market value of the stock subject to the option at the time the option was granted depends on the relevant facts and circumstances.

An attempt to set the option price at not less than fair market value is not regarded as made in good faith where an adjustment of the option price to reflect amounts treated as interest results in the option price being lower than the fair market value on which the option price was based. For purposes of determining the minimum option price for purposes of this paragraph f , the rules described in paragraph e 2 of this section, relating to the good-faith determination of the option price, do not apply.

Stock that the optionee may purchase under outstanding options is not treated as stock owned by the individual. The determination of the percentage of the total combined voting power of all classes of stock of the employer corporation or of its related corporations that is owned by the optionee is made with respect to each such corporation in the related group by comparing the voting power of the shares owned or treated as owned by the optionee to the aggregate voting power of all shares of each such corporation actually issued and outstanding immediately before the grant of the option to the optionee.

The aggregate voting power of all shares actually issued and outstanding immediately before the grant of the option does not include the voting power of treasury shares or shares authorized for issue under outstanding options held by the individual or any other person. The rules of this paragraph f are illustrated by the following examples:.

M has , shares of its common stock outstanding. The option granted to E fails to meet the option-price and term requirements described in paragraph f 1 of this section and, thus, the option is not an incentive stock option.

Assume the same facts as in paragraph i of this Example 1. Assume further that M is a subsidiary of P Corporation. Regardless of whether E owns any P stock and the number of P shares outstanding, if P Corporation grants an option to E which purports to be an incentive stock option, but which fails to meet the percent-option-price and 5-year-term requirements, the option is not an incentive stock option because E owns more than 10 percent of the total combined voting power of all classes of stock of a related corporation of P Corporation i.

An individual who owns or is treated as owning stock in excess of the ownership specified in paragraph f 1 of this section, in any corporation in a group of corporations consisting of the employer corporation and its related corporations, cannot be granted an incentive stock option by any corporation in the group unless such option meets the percent-option-price and 5-year-term requirements of paragraph f 1 of this section.

R has only one class of stock, of which , shares are issued and outstanding. F owns no stock in R Corporation or any related corporation of R Corporation. On April 1, , F exercises half of the January option and receives 25, shares of R stock that previously were not outstanding. On July 1, , R grants a second 50, share option to F which purports to be an incentive stock option. However, the July option is not an incentive stock option because, on the date that it is granted, F owns 20 percent 25, shares owned by F divided by , shares of R stock issued and outstanding of the total combined voting power of all classes of R Corporation stock and, thus the pricing requirements of paragraph f 1 of this section are not met.

Under these circumstances, the July option is an incentive stock option, because, on the date of grant of the July option, F does not own more than 10 percent of the total combined voting power 10, shares owned by F divided by , shares of R issued and outstanding of all classes of R Corporation stock.

To determine whether the limitation described in paragraph a 2 of this section has been exceeded, the following rules apply:. After an acceleration provision is triggered, the options subject to such provision are then taken into account in accordance with paragraph b 3 of this section for purposes of applying the limitation described in paragraph a 2 of this section to all options first exercisable during a calendar year.

For purposes of this paragraph b 4 , an acceleration provision includes, for example, a provision that accelerates the exercisability of an option on a change in ownership or control or a provision that conditions exercisability on the attainment of a performance goal.

internal revenue code incentive stock options

See paragraph d , Example 4 of this section. The application of the rules described in paragraph b of this section may result in an option being treated, in part, as an incentive stock option and, in part, as a nonstatutory option.

The following examples illustrate the principles of this section. In each of the following examples E is an employee of X Corporation. The examples are as follows:. Effective January 1, , X Corporation adopts a plan under which incentive stock options may be granted to its employees.

The options qualify as incentive stock options determined without regard to this section. On January 1, , E exercises all of the options. X Corporation is a parent corporation of Y Corporation, which is a parent corporation of Z Corporation. Each corporation has adopted its own separate plan, under which an employee of any member of the corporate group may be granted options for stock of any member of the group.

internal revenue code incentive stock options

Both of the options are immediately exercisable. For purposes of this section, options are taken into account in the order in which granted using the fair market value of stock as of the date on the option is granted. Therefore, the option for Y Corporation stock is treated as an incentive stock option, and the option for Z Corporation stock is treated as a nonstatutory option.

The dates of grant, the fair market value of the stock as of the applicable date of grant with respect to which the options are exercisable, and the years in which the options are first exercisable without regard to acceleration provisions are as follows:. Option 3 is treated as a nonstatutory option in its entirety. Exercise of option and acceleration provision.

On September 1, , a change of control of X Corporation occurs, and, under the terms of its option plan, Option 2 becomes immediately exercisable. Option 1 is treated as an incentive stock option in its entirety. Because options are taken into account in the order in which they are granted, Option 1 and Option 2 are treated as incentive stock options in their entirety. Because the exercise of Option 3 on June 1, takes place after the acceleration provision is triggered, Option 3 is treated as a nonstatutory option in its entirety.

Because Option 2 is canceled before the calendar year during which it would have become exercisable for the first time, it is disregarded.

As a result, Option 1 and Option 3 are treated as incentive stock options in their entirety. Because options are taken into account in the order in which granted, Option 1 is treated as an incentive stock option in its entirety. A disqualifying disposition has no effect on the determination of whether the underlying option is considered outstanding during the calendar year during which it is first exercisable.

An option that otherwise qualifies as an incentive stock option does not fail to be an incentive stock option merely because such option contains one or more of the provisions described in paragraphs b , c , and d of this section.

For all purposes, the holding period of such shares begins as of the date that such shares are transferred to the optionee. An option does not fail to be an incentive stock option merely because the optionee has the right to receive additional compensation, in cash or property, when the option is exercised, provided such additional compensation is includible in income under section 61 or section The amount of such additional compensation may be determined in any manner, including by reference to the fair market value of the stock at the time of exercise or to the option price.

For example, an alternative right extending the option term beyond ten years, setting an option price below fair market value, or permitting transferability prevents an option from qualifying as an incentive stock option.

For this purpose, the exercise of the alternative right does not have the same economic and tax consequences if the payment exceeds the difference between the then fair market value of the stock and the exercise price of the option. The principles of this section are illustrated by the following examples:. The option provides that A may exercise the option with previously acquired shares of X Corporation common stock. X Corporation has only one class of common stock outstanding.

Under the rules of section 83, the shares transferable to A through the exercise of the option are transferable and not subject to a substantial risk of forfeiture. After exercising the option, A owns shares of incentive stock option stock.

Assume the same facts as in Example 1. Because the holding period requirements were not satisfied, A made a disqualifying disposition of the 75 shares on September 1, Under the rules of paragraph b 2 and b 3 of this section, A has sold all 60 of the non-section shares and 15 of the 40 section shares. Assume the same facts as in Example 2 , except that, instead of selling the 75 shares of incentive stock option stock on September 1, , A uses those shares to exercise a second incentive stock option.

Under paragraph b of this section, A has disposed of all 60 of the non-section shares and 15 of the 40 section shares. Unlike Example 2 , A does not recognize any capital gain as a result of exercising the second option because, for all purposes other than the determination of whether the exercise is a disposition pursuant to section c , the exercise is considered an exchange to which section applies.

After exercising the second option, A owns a total of shares of incentive stock option stock. Assume the same facts as in Example 2 , except that, instead of selling the 75 shares of incentive stock option stock on September 1, , A uses those shares to exercise a nonstatutory option. Unlike Example 3 , A has not made a disqualifying disposition of the 75 shares of stock. After exercising the nonstatutory option, A owns a total of shares of incentive stock option stock and 25 shares of nonstatutory stock option stock.

Under section and so much of section as relates to section , the 75 new shares of incentive stock option stock have the same basis and holding period as the 75 old shares used to exercise the nonstatutory option. The additional 25 shares of stock received upon exercise of the nonstatutory option are taxed under the rules of section 83 a. Assume the same facts in Example 1 , except that the shares transferred pursuant to the exercise of the incentive stock option are subject to a substantial risk of forfeiture and not transferable substantially nonvested for a period of six months after such transfer.

Assume further that the shares that A uses to exercise the incentive stock option are similarly restricted. After exercising the incentive stock option with the 40 substantially-nonvested shares, A owns shares of substantially-nonvested incentive stock option stock. Section and so much of section as relates to section applies to the 40 shares exchanged in exercise of the incentive stock option. However, pursuant to section 83 g , the stock received in such exchange, because it is incentive stock option stock, is not subject to restrictions and conditions substantially similar to those to which the stock given in such exchange was subject.

Adding newly designated paragraph c 4 Examples 7 through 9. Redesignating paragraph e 6 as paragraph e 5 and removing the second and third sentences. In list below, for each section indicated in the left column, remove the language in the middle column and add the language in the right column:. For the definition of modification , see paragraph e of this section. For a substitution or assumption to qualify under this paragraph a , the substitution or assumption must meet all of the requirements described in paragraphs a 4 and a 5 of this section.

For purposes of this paragraph a , the term eligible corporation means a corporation that is the employer of the optionee or a related corporation of such corporation. For purposes of this paragraph a , the determination of whether a corporation is the employer of the optionee or a related corporation of such corporation is based upon all of the relevant facts and circumstances existing immediately after the corporate transaction.

For purposes of this paragraph a , the term corporate transaction includes—. For example, a change in an option or issuance of a new option will be considered to be made for reasons unrelated to a corporate transaction if there is an unreasonable delay between the corporate transaction and such change in the option or issuance of a new option, or if the corporate transaction serves no substantial corporate business purpose independent of the change in options.

Similarly, a change in the number or price of shares purchasable under an option merely to reflect market fluctuations in the price of the stock purchasable under an option is not by reason of a corporate transaction.

For a change in an option or issuance of a new option to qualify as a substitution or assumption under this paragraph a , all of the requirements described in this paragraph a 5 must be met.

There cannot be a substitution of a new option for an old option within the meaning of this paragraph a if the optionee may exercise both the old option and the new option. It is not necessary to have a complete substitution of a new option for the old option. However, any portion of such option which is not substituted or assumed in a transaction to which this paragraph a applies is an outstanding option to purchase stock or, to the extent paragraph e of this section applies, a modified option.

The number of shares subject to the new or assumed option may be adjusted to compensate for any change in the aggregate spread between the aggregate option price and the aggregate fair market value of the shares subject to the option immediately after the change in the option or issuance of the new option as compared to the aggregate spread between the option price and the aggregate fair market value of the shares subject to the option immediately before the change in the option or issuance of the new option.

For a change in the option or issuance of a new option to meet the requirements of this paragraph a , it is not necessary to show that the corporation changing an option or issuing a new option is under any obligation to do so. In fact, this paragraph a may apply even when the option that is being replaced or assumed expressly provides that it will terminate upon the occurrence of certain corporate transactions.

However, this paragraph a cannot be applied to revive a statutory option which, for reasons not related to the corporate transaction, expires before it can properly be replaced or assumed under this paragraph a. For purposes of applying the rules of this paragraph a , a substitution or assumption is considered to occur on the date that the optionee would, but for this paragraph a , be considered to have been granted the option that the eligible corporation is substituting or assuming.

A substitution or an assumption that occurs by reason of a corporate transaction may occur before or after the corporate transaction. The principles of this paragraph a are illustrated by the following examples:. X Corporation acquires a new subsidiary, Y Corporation, and transfers some of its employees to Y. Y Corporation wishes to grant to its new employees and to the employees of X Corporation new options for Y shares in exchange for old options for X shares that were previously granted by X Corporation.

Because Y Corporation is an employer with respect to its own employees and a related corporation of X Corporation, Y Corporation is an eligible corporation under paragraph a 2 of this section with respect to both the employees of X and Y Corporations. Generally, the issuance of a new option is considered to be by reason of a corporate transaction. None of the facts in this Example 2 indicate that the new option is not issued by reason of the stock dividend.

In addition, the new option is issued on the same stock as the old option. Thus, the substitution occurs by reason of the corporate transaction. Assuming the other requirements of this section are met, the issuance of the new option is a substitution that meets the requirements of this paragraph a and is not a modification of the option.

Assume further that on December 1, , Z declares an ordinary cash dividend. Under paragraph a 3 ii of this section, an ordinary cash dividend is not a corporate transaction. Thus, the exchange of the new option for the old option does not meet the requirements of this paragraph a and is a modification of the option. On May 2, , A Corporation transfers several employees, including E, to B Corporation, a related corporation.

The following day, B Corporation grants to E, one of its new employees, an option to acquire shares of B stock in exchange for the old option held by E to acquire A stock. Under paragraph a 3 i of this section, the purchase of assets is a corporate transaction. Generally, the substitution of an option is considered to occur by reason of a corporate transaction.

Thus, the exchange of the new option for the old option is not by reason of a corporate transaction that meets the requirements of this paragraph a and is a modification of the old option. On September 1, , Corporation A has one class of stock outstanding and declares a stock dividend of one share of common stock for each outstanding share of common stock.

The rights associated with the common stock issued as a dividend are the same as the rights under existing shares of stock. The per-share exercise price is equal to one half of the per-share exercise price of the original option. The stock dividend merely changes the number of shares of Corporation A outstanding and effects no other change to the stock of Corporation A.

On June 1, , P Corporation acquires percent of the shares of S Corporation and issues a new option to purchase P shares in exchange for an old option to purchase S shares that is held by E, an employee of S.

Because the new option is exercisable for an additional period of time beyond the time allowed under the old option, the effect of the exchange of the new option for the old option is to give E an additional benefit that E did not enjoy under the old option. Thus, the requirements of paragraph a 5 of this section are not met, and this paragraph a does not apply to the exchange of the new option for the old option. Therefore, the exchange is a modification of the old options. Spread and ratio tests.

E is an employee of S Corporation. Ratio test and partial substitution. X Corporation forms a new corporation, Y Corporation, by a transfer of certain assets and, in a spin-off, distributes the shares of Y Corporation to the stockholders of X Corporation. E, an employee of X Corporation, is thereafter an employee of Y. However, because X is no longer a related corporation with respect to Y, E must exercise the option for shares of X within three months from the date of the spinoff for the option to be treated as a statutory option.

Under the plan, options to acquire X stock are granted to X employees. X Corporation is acquired by Y Corporation and becomes a subsidiary corporation of Y Corporation. After the acquisition, X employees remain employees of X.

In connection with the acquisition, Y Corporation substitutes new options to acquire Y stock for the old options to acquire X stock previously granted to the employees of X. As a result of this substitution, on exercise of the new options, X employees receive Y Corporation stock.

If the other requirements of paragraphs a 4 and 5 of this section are met, the issuance of new options for Y stock in exchange for the old options for X stock meets the requirements of this paragraph a and is not a modification of the old options. Assume further that as part of the acquisition, X amends its plan to allow future grants under the plan to be grants to acquire Y stock.

X Corporation merges into Y Corporation. Y Corporation retains employees of X who hold old options to acquire X Corporation stock. When the former employees of X exercise the old options, Y Corporation issues Y stock to the former employees of X.

Under paragraph a 7 of this section, because Y issues its stock on exercise of the old options for X stock, there is a change in the terms of the old options for X stock. Thus, the issuance of Y stock on exercise of the old options is a modification of the old options. S Corporation is a subsidiary of D Corporation. On March 1, , D Corporation spins off S Corporation.

E remains an employee of D Corporation. In connection with the spin off, D Corporation substitutes a new option to acquire D Corporation stock and a new option to acquire S Corporation stock for the old option in a manner that meets the requirements of paragraph a of this section. However, because S is no longer a related corporation with respect to D Corporation, E must exercise the option for S stock within three months from March 1, , for the option to be treated as a statutory option.

The substitution of the new option to acquire S and D stock for the old option to acquire D stock is not a modification of the old option. However, because the employment relationship between E and D Corporation terminated on February 20, , E must exercise the option for the D and S stock within three months from February 20, , for the option to be treated as a statutory option.

E makes no disposition of the shares before January 2, On January 1, , X Corporation grants an incentive stock option to E, an employee of X Corporation. As part of the acquisition, all X Corporation shares are converted into Y Corporation shares.

After the conversion, if an optionee holds a fractional share of Y Corporation stock, Y Corporation will purchase the fractional share for cash equal to its fair market value. Also, for such purposes, if a domestic or foreign corporation, partnership, estate, or trust owns directly or indirectly shares of the employer corporation or of a related corporation, the shares are considered to be owned proportionately by or for the stockholders, partners, or beneficiaries of the corporation, partnership, estate, or trust.

The extent to which stock held by the optionee as a trustee of a voting trust is considered owned by the optionee is determined under all of the facts and circumstances. The new option may or may not be a statutory option.

In contrast, for example, a change in the terms of the option shortening the period during which the option is exercisable is not a modification. However, a change providing an extension of the period during which an option may be exercised such as after termination of employment or a change providing an alternative to the exercise of the option such as a stock appreciation right is a modification regardless of whether the optionee in fact benefits from such extension or alternative right.

Similarly, a change providing an additional benefit upon exercise of the option such as the payment of a cash bonus or a change providing more favorable terms for payment for the stock purchased under the option such as the right to tender previously acquired stock is a modification. Additionally, no modification occurs if a provision accelerating the time when an option may first be exercised is removed prior to the year in which it would otherwise be triggered. In addition, the exercise of discretion to provide an additional benefit is a modification of the option.

An option is not modified merely because an optionee is offered a change in the terms of an option if the change to the option is not made. An offer to change the terms of an option that remains open less than 30 days is not a modification of the option.

However, if an offer to change the terms of an option remains outstanding for 30 days or more, there is a modification of the option as of the date the offer to change the option is made. Notwithstanding the previous sentence, if the exercise price and number of shares subject to an option are proportionally adjusted to reflect a stock split including a reverse stock split or stock dividend, and the only effect of the stock split or stock dividend is to increase or decrease on a pro rata basis the number of shares owned by each shareholder of the class of stock subject to the option, then the option is not modified if it is proportionally adjusted to reflect the stock split or stock dividend and the aggregate exercise price of the option is not less than the aggregate exercise price before the stock split or stock dividend.

A renewal of an option is the granting by the corporation of the same rights or privileges contained in the original option on the same terms and conditions. The rules of this paragraph apply as well to successive modifications, extensions, and renewals. Thus, for example, if the terms of an option are inadvertently changed on March 1 to extend the exercise period and the change is removed on November 1, then if the option is not exercised prior to November 1, the option is not considered modified under this paragraph e.

The term parent corporation , or parent , means any corporation other than the employer corporation in an unbroken chain of corporations ending with the employer corporation if, at the time of the granting of the option, each of the corporations other than the employer corporation owns stock possessing 50 percent or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.

The term subsidiary corporation , or subsidiary , means any corporation other than the employer corporation in an unbroken chain of corporations beginning with the employer corporation if, at the time of the granting of the option, each of the corporations other than the last corporation in an unbroken chain owns stock possessing 50 percent or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.

This statement must include the following information—. The term transfer agent , as used in this section, means any designee authorized to keep the stock ownership records of a corporation and to record a transfer of title of the stock of such corporation on behalf of such corporation. Thus, for example, if the owner has record title to a share or shares of stock transferred to a recognized broker or financial institution and the stock is subsequently sold by such broker or institution on behalf of the owner , the corporation is only required to furnish a written statement to the owner relating to the transfer of record title to the broker or financial institution.

Similarly, a written statement is required when a share of stock is transferred by the optionee to himself and another person or persons as joint tenants, tenants by the entirety or tenants in common. However, when stock is originally issued to the optionee and another person or persons as joint tenants, or as tenants by the entirety, the written statement required by this paragraph shall be furnished at such time and in such manner as is provided by this section with respect to the first transfer of the title to such stock by the optionee.

Such identification may be accomplished by assigning to the certificates of stock issued pursuant to the exercise of such options a special serial number or color.

Each statement required by this section to be furnished to any person for a calendar year must be furnished to such person on or before January 31 of the year following the year for which the statement is required. For good cause shown upon written application of the corporation required to furnish statements under this section, the Director, Martinsburg Computing Center, may grant an extension of time not exceeding 30 days in which to furnish such statements.

The application must contain a full recital of the reasons for requesting an extension to aid the Director in determining the period of the extension, if any, which will be granted and must be sent to the Martinsburg Computing Center Attn: Extension of Time Coordinator. Such a request in the form of a letter to the Martinsburg Computing Center, Murall Drive, Kearneysville, West Virginia , signed by the applicant or its agent will suffice as an application.

The application must be filed on or before the date prescribed in paragraph c 1 of this section for furnishing the statements required by this section, and must contain the employer identification number of the corporation required to furnish statements under this section. For provisions relating to the penalty provided for failure to furnish a statement under this section, see section The statements required to be furnished pursuant to this section may be provided in an electronic format in lieu of a paper format, with the consent of the recipient.

For statutory options transferred on or before June 9, , taxpayers may rely on the proposed regulations LR 49 FR , the proposed regulations REG 68 FR , or this section until the earlier of January 1, , or the first regularly scheduled stockholders meeting of the granting corporation occurring 6 months after August 3, For statutory options transferred after June 9, , and before the earlier of January 1, , or the first regularly scheduled stockholders meeting of the granting corporation occurring at least 6 months after August 3, , taxpayers may rely on either the REG or this section.

Matthews , Deputy Commissioner for Services and Enforcement. Gregory Jenner , Acting Assistant Secretary of Treasury. Filed by the Office of the Federal Register on August 2, , 8: However, other personnel from the IRS and Treasury Department participated in their development. Subscriptions IRS Guidewire IRS Newswire QuickAlerts e-News for Tax Professionals IRS Tax Tips More.

Table of Contents AGENCY: Special rules regarding disqualifying dispositions. Definitions and Special Rules. Substitution, Assumption, and Modification of Options. Modification, extension, or renewal of option. Effective date and reliance. Proposed Amendments to the Regulations. PART 1 — INCOME TAXES. Newly Designated Section Remove Add 1. Section Remove Add 1. PART —OMB CONTROL NUMBERS UNDER THE PAPERWORK REDUCTION ACT.

CFR part or section where identified and described Current OMB control No. Note Filed by the Office of the Federal Register on August 2, , 8: Know Your Rights Taxpayer Bill of Rights Taxpayer Advocate Accessibility Civil Rights Freedom of Information Act No FEAR Act Privacy Policy. Treasury Treasury Inspector General for Tax Administration USA. The exercise of such. More Internal Revenue Bulletins.

inserted by FC2 system