It appears the Internal Revenue Service may be starting to go after easy targets under Section 409A of the Internal Revenue Code, including additional taxes on discounted stock options totalling almost $3.5 million.
In Sutardja v. United States, the Court of Federal Claims confirmed that Section 409A applies to a discounted stock option when it ruled in favor of the United States on several key issues determined on summary judgment. In the attached article, the authors provide a summary of the relevant Section 409A rules and the recent development in Sutardja, along with a few general observations.
