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ARTICLE · 03 MARCH 2014

IRS Issues Final Regulations Under Internal Revenue Code Section 83 Regarding Substantial Risk Of Forfeiture Analysis

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Companies that compensate their employees with annual or long-term awards of restricted property such as restricted stock grants should take note of the final regulations relating to property transferred in connection with the performance of services under Internal Revenue Code Section 83 issued by the Internal Revenue Service on February 25, 2014 (the "Final Regulations").

United StatesEmployment and HR
Joshua Miller
Joshua Miller
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Companies that compensate their employees with annual or long-term awards of restricted property such as restricted stock grants should take note of the final regulations relating to property transferred in connection with the performance of services under Internal Revenue Code Section 83 issued by the Internal Revenue Service on February 25, 2014 (the "Final Regulations").  These rules impact the timing of taxation of restricted stock grants and other compensatory transfers of property. 

The Final Regulations are substantially similar to the proposed regulations issued by the IRS in May 2012, which we discussed in our June 2012 Client Alert, "IRS Issues Proposed Regulations under Internal Revenue Code Section 83 Regarding Substantial Risk of Forfeiture Analysis," available here, but further clarify the impact of insider trading restrictions under Section 16(b) of the Securities Exchange Act of 1934 and involuntary separations from service on the Section 83

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