The Internal Revenue Service is examining as many as 40 companies -- investigating the appropriateness of deductions for backdated stock options, as well as the reporting of income by affected executives and the relevance of the laws governing Incentive Stock Options.
According to published reports, in recent weeks, the agency has told its corporate auditors to start reviewing the tax returns of dozens of executives and companies which may have improperly reported stock option grants. The preliminary investigations are expected to take months and appears aimed at both companies that took improper tax deductions, as well as executives who might have misreported income.
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