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Tax Urgency for Backdated (or Misdated) Stock Options: 409A Penalties Absent Action in 2006

October 12, 2006

By Mark Poerio with Betty Brower, Eric Keller and Mike Zuppone

On October 4, 2006, the Treasury Department and the IRS signaled their intent to apply penalties under Section 409A of the Internal Revenue Code to those who have received stock options or stock appreciation rights (aka SARs) that were backdated or mis-dated, granted to Section 16 reporting persons, and not subject to corrective amendments before the end of  2006.

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Contributors

Image: Eric R Keller
Eric R Keller
Partner, Tax Department
Image: Michael L Zuppone
Michael L Zuppone
Partner, Corporate Department