The executive stock option settlement initiative launched in February has received a strong turnout, according to the Internal Revenue Service. The initiative provided corporate executives and their companies a means to resolve an abusive tax transaction involving the transfer of stock options to family controlled partnerships.
"When we announced this initiative in February, we wanted to give corporations and executives a chance to turn the page and make things right," said IRS Commissioner Mark W. Everson. "The vast majority of those involved chose to come forward under the settlement's tough terms. The response reflects higher standards for corporate governance and less tolerance for abusive tax transactions."
Of 124 executives identified, 10 were determined not to have participated in the abusive transaction. Of the remaining 114, 80 executives elected to participate under the terms of the settlement offer. Fifteen other executives reached agreement through the audit process. Nineteen individuals did not elect to participate. Those who declined to participate in the settlement offer are either under audit or had other pending criminal tax investigations.
These results build on the success of the recent Son of Boss settlement initiative. To date, more than 1,200 electing taxpayers have qualified to participate in this offer, with the total revenue to the government expected to approach $4 billion. About 750 taxpayers did not elect or did not qualify to participate in the Son of Boss settlement offer. So far, more than 100 Son of Boss cases are in court, and the IRS expects the first cases to go to trial by early fall.
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