The Internal Revenue Service has published new regulations to shield workers who unwittingly received backdated stock options from getting hit by a huge tax liability—but companies must act fast if they want to protect their employees via the new program.
Known as the Compliance Resolution Program and unveiled by the IRS on Feb. 8, the rules allow companies to pay the hefty tax penalties levied on certain discounted stock rights exercised in 2006 by non-executive employees; otherwise, under Section 409A of the federal tax code, those employees would have to pay that tax themselves, even if they had nothing to do with the backdating of the grants.
