IRS Announces Correction Program for Discounted Stock Options Under §409A

The Internal Revenue Service has announced a correction program that will allow certain employees to avoid some of the §409A tax penalties that would otherwise result from the 2006 exercise of stock options and stock appreciation rights (SARs) with an exercise price below the fair market value of the stock at the time the award was granted. In order to use the program, an employer must file a notice with the IRS not later than February 28, 2007.