Sen. Levin Statement: Abusive Stock Option Tax Shelter Settlement Offer
Feb. 22, 2005
WASHINGTON — Sen. Carl Levin, D-Mich., issued the following statement today:
"The abusive stock option tax shelter targeted by the IRS today was offered to hundreds of corporate executives as a way to skip paying the taxes they owed on the stock options they got from their companies. It is ironic that many of the executives using this abusive tax shelter apparently valued their stock options using the Black-Scholes method — while this valuation method has been called inaccurate or unreliable by some, it was apparently the method of choice for many top executives pricing their stock options.
"This abusive tax scheme could not have succeeded without the participation of corporations who agreed to change supposedly ‘non-transferable’ stock options into ‘transferable’ options that could be sold by an executive to a so-called family partnership. I expect that many executives and companies involved with this abusive tax shelter will accept the settlement terms offered by the IRS today."
- IR-2005-17, Settlement Offer Extended for Executive Stock Option Scheme