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On May 5, 2021, the House Ways and Means Committee unanimously passed the SECURE Act 2.0 (H.R. 2954).The bill makes a number of changes to retirement plan law but, unlike the version introduced last year, does not include a provision allowing owners of S corporation ESOPs to get the same Section 1042 tax deferral on the sale of stock to an ESOP trust as owners of C corporation ESOPs can.

Robert Willens, the ubiquitously quoted tax analyst at Lehman Brothers, told the Wall Street Journal on April 9 that ESOP S corporations would be the "wave of the future" in merger and acquisition transactions.

Business owners frequently choose to operate as a limited liability company (LLC) because it provides for a less formal governance structure and the option to be taxed as a partnership. But the downside for LLC owners considering an ESOP is that an ESOP must be invested primarily in “employer securities” and LLC membership interests don’t count. The solution is to convert the LLC into a corporation.

The NCEO has updated its special bulletin on tax reform to incorporate the impact of provisions that focus specifically on certain broad-based equity compensation programs in private companies.

The tax reform framework issued by the Trump Administration, not surprisingly, does not say anything about ESOPs.

The Senate-House conference committee is expected to release the text of the compromise tax reform bill as we write this update, and a vote is expected in both chambers next week.

IRS Commissioner Mark Everson told the National Press Club on March 14 that tax reform is not a high priority for the Administration or Congress, and that the Administration, in particular, shows no interest in moving on the proposals set forth in the President's Advisory Panel on Federal Tax Ref

The taxation of employee stock purchase plans (ESPPs) is sufficiently complex that even people who know the field sometimes get confused. So imagine how hard it is for employees to figure it out.

The Taxpayer Relief Act of 1997 (the "Act"), reported on in the previous installment of this column and now about to be signed into law, contains provisions affecting employee ownership plans.

Thirty-three technology companies have proposed an alternative to stock options expensing.