EMPLOYMENT TAX

Notice 2001–72, page 548. This document proposes rules regarding income tax withholding and reporting obligations upon the sale or disposition of stock acquired pursuant to the exercise of a statutory stock option. This document also requests comments as to the proposed rules, and expresses the intent to issue a notice with final rules to accompany the issuance of final regulations addressing the application of the Federal Insurance Contributions Act (FICA), Federal Unemployment Tax Act (FUTA), and income tax withholding to statutory stock options.

Notice 2001–73, page 549. This document proposes rules of administrative convenience regarding application of the Federal Insurance Contributions Act (FICA) and Federal Unemployment Tax Act (FUTA) to statutory stock options. This document also requests comments as to the proposed rules, and expresses the intent to issue a notice with final rules to accompany the issuance of final regulations addressing the application of FICA, FUTA, and income tax withholding to statutory stock options.

REG–142686–01, page 561. Proposed regulations provide that for purposes of the Federal Insurance Contributions Act (FICA) and the Federal Unemployment Tax Act (FUTA), at the time of the exercise of a statutory stock option (i.e., an incentive stock option under section 422 of the Code or an option granted pursuant to an employee stock purchase plan under section 423 of the Code), the individual who was granted the statutory stock option receives wages. Therefore, FICA tax and FUTA tax are applicable at that time; however, income tax withholding is not required. A public hearing is scheduled for March 7, 2002.

(Continued on the next page) Finding Lists begin on page ii. Index for July through November begins on page iv.