CUNA Regulatory Comment Call


July 12, 2002

Changes to IRS Rules on Discounted Option Plans for Employees of Tax-Exempt Organizations

EXECUTIVE SUMMARY

QUESTIONS REGARDING THE PROPOSED REGULATIONS

  1. Does your credit union offer discounted options?

    Yes ______ No ______

    If yes, please describe your plan.













  2. Have you investigated the possibility of offering a discounted option plan?

    Yes ______ No ______

    If so, what was the outcome of your study?













  3. Do you believe the proposed changes would have the effect of eliminating discounted option plans for tax-exempt organizations?

    Yes ______ No ______

    If so, please elaborate.













  4. The proposed changes appear to grandfather existing discounted options that have been granted and to prohibit any new ones after May 8, 2002. If this is correct, do you believe that this inability to grant new options to current and future employees would result in similarly situated employees having materially different compensation arrangements?

    Yes ______ No ______

    Please explain.













  5. Do you have recommendations on the coordination of Section 457(f) and Section 83 under the proposed regulations?

    Yes ______ No ______













    If so, what are those recommendations?















  6. There are many differences between taxable entities and tax-exempt organizations. Do you believe that employees of tax-exempt entities (like credit unions) should be denied this tool to defer taxes until income is received?

    Yes ______ No ______

    Please explain.













  7. Other comments?













Eric Richard • General Counsel • (202) 508-6742 • erichard@cuna.com
Mary Mitchell Dunn • SVP & Associate General Counsel • (202) 508-6736 • mdunn@cuna.com
Jeffrey Bloch • Assistant General Counsel • (202) 508-6732 • jbloch@cuna.com
Catherine Orr • Senior Regulatory Counsel • (202) 508-6743 • corr@cuna.com