Tax consequences of backdating options twinkle revue dating sim cheats
As noted below, the failure to record income tax expense properly can also trigger a restatement. Stock options granted at a discount, whether due to backdating or otherwise, may result in tax issues.
Some state attorneys general have also begun investigations concerning option-granting practices.
In some cases, the options may be grandfathered from the new rules or may be eligible for special transition relief before January 1, 2007.
Otherwise, the options must be substantially amended prior to January 1, 2007, in order to comply with the new law, or significant tax penalties could be imposed on the optionees.
If an investigation reveals material errors related to option grants, liability may arise under the financial reporting, books and records, and internal control provisions of the Securities Exchange Act of 1934 (Exchange Act Sections 13(a) and 13(b) and the SEC rules promulgated thereunder).
Such misconduct could also expose a company and the officers and directors involved to further violations of the anti-fraud provisions of the Securities Act of 1933 and the Exchange Act (Securities Act Section 17(a), Exchange Act Section 10(b), and Rule 10b-5).