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IRS Eyeing Executive Pay The taxman is focusing closely on executive pay this tax season. Items under scrutiny include family travel, corporate credit card use, and even your company-issued cell phone.

Marie Leone, CFO.com | US
April 10, 2006

CPA Search Group

I.R.S. S.O.S..

Posted by J Whisman | Apr 11, 2006 11:56 AM ET

Correction to previous comment

The executive would have taxable income on the date of vesting of the option, under 409A, not at the time of grant. And the company already has an expense for the option under FAS123R; the discount would create some incremental expense but not in the full amount of the discount.

Fred Whittlesey
Compensation Venture Group, Inc.

Posted by Fred Whittlesey | Apr 11, 2006 12:34 AM ET

Option Pricing

The IRS has also been scrutinizing companies' processes for issuance of stock options to executives. The primary question is whether the options really were FMV at the date of grant. If the options were in-the-money at the time they were granted, then the executives have taxable income and the companies have compensation expenses.

Posted by Allison Garrett | Apr 10, 2006 1:20 PM ET