Ezel / IRS Rulings / 200401021

200401021: IRS revokes earlier stock option plan ruling

Number
200401021
Outcome
Revocation
Document type
Determination Letter
IRS subject
Stock Bonus and Profit-Sharing Trusts; Discrimination as to Contributions or Benefits; Annual Addition
Topics
Retirement plans, IRAs, and annuities
Code sections
§ 404, § 401, § 415
Ruling dated
October 7, 2003
Publicly released
January 2, 2004
Source
View Official PDF

Apply this to your situation

This page covers one taxpayer's determination, issued in 2004, which can't be cited as precedent. Ask about your situation and see what the current Code and IRS guidance say, with citations.

Currency note: this determination was released in 2004
Statutory amendments, regulation changes, court decisions, or later IRS guidance may have changed the analysis since then. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, threshold, or position mentioned here.
Not precedent. Under 26 U.S.C. § 6110(k)(3), this written determination may not be used or cited as precedent. It resolved one taxpayer's situation on its specific facts, and identifying details were redacted by the IRS before release. The official IRS release (linked on this page as a PDF) is the authoritative source.
About this page: The plain-English summary and ruling snapshot below were written by Ezel based on the official IRS release. The full text is the IRS's own document.
Transcribed from a scanned original: the IRS released this determination as an image-only PDF. The full text below is a machine transcription, proofread against the scan. Check the original PDF before quoting exact language.
View official IRS release (PDF)

Plain-English summary

The IRS revoked an earlier private letter ruling about contributing stock options to a qualified retirement plan and then exercising them to buy the employer's common stock. It had announced in 1997 that it was reconsidering the earlier ruling and the plan qualification and other tax issues involved. This letter says those issues were still under consideration and formally revokes PLR 9712033. It does not give a new substantive ruling on the stock option transaction.

Ruling snapshot

  • Question: What is the status of the earlier ruling on stock option contributions and exercise by the plan?
  • Outcome: Revocation: PLR 9712033 was revoked.
  • Key authorities: Announcement 97-45, 1997-17 I.R.B. 20.

Full text (IRS public release)

DEPARTMENT OF THE TREASURY
200401021
INTERNAL REVENUE SERVICE
WASHINGTON, D.C. 20224

TAX EXEMPT AND GOVERNMENT ENTITIES DIVISION
OCT 7 2003

UICs: 404.02-00
401.04-00
415.02-01

Attn:

Ladies and gentlemen:

This is in reference to Announcement 97-45, 1997-17 I.R.B. 20 (April 28, 1997) in which the Internal Revenue Service indicated that it was reconsidering PLR 9712033 issued to you on December 24, 1996. In Announcement 97-45, the Service indicated that it was reexamining the plan qualification and other tax issues raised by a contribution of stock options to a qualified plan and the subsequent exercise of those options to be used in the purchase of the common stock of the employer maintaining the plan.

The Service is still considering those issues. Accordingly, the Service hereby revokes PLR 9712033.

Pursuant to a power of attorney on file with this office, a copy of this letter is being sent to your authorized representative.

If you have any questions, please contact at

Sincerely yours,

Frances V. Sloan
Manager, Employee Plans
Technical Group 3

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