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Stock Option Accounting Helped Drive Book-Tax Plan: IRS Official

June 22, 2021, 6:31 PM

A Biden administration proposal for a minimum tax on book income was driven significantly by a difference between how stock option expenses are calculated on financial statements and how they are treated for tax purposes, an IRS official said Tuesday.

The administration has proposed a 15% tax on book profits, ensuring companies pay a minimum amount in taxes even if they have large deductions and credits that would otherwise significantly reduce their tax bills.

The difference between the financial and tax accounting treatments of stock options is “a lot of what’s driving that,” said Peter Blessing, associate chief counsel (international) ...