Federal Tax Day - Current, L.3, Code Sec. 482: Prospective Consent Granted to Change Elective Method (LTR 202634001), (Aug 24, 2026)

A domestic corporation was granted a 60-day prospective consent to change to the elective method for measuring and timing employee stock options, restricted shares and restricted share units (SBC) incurred in the intangible development activities. The prospective consent was covered by Reg. §1.482-7(d)(3)(iii)(B) and Notice 2005-99. The taxpayer represented that it would remain compliant with all recordkeeping requirements with respect to the cost sharing arrangements (CSAs). Further, the SBC was restricted stock units and options with respect to the taxpayer’s publicly traded stock within the meaning of Reg. §1.482-7(d)(3)(iii)(B). Therefore, granting relief did not prejudice the government's interests.

IRS Letter Ruling 202634001