1. You seem to be over-reacting...if you got stock at a discount, at most you would pay tax on the attributed income from the difference between what you paid and FMV.
1. Nope - the attny explicitly pointed to massive penalties and interest, that go far beyond the shortfall. Once they got a hold of this scheme, they REALLY did not want it to continue, and were happy to make examples of anyone stupid enough to keep trying it, or anything like it.
2. Yes, these may be possible under some circumstances, depending on the details, e.g., perhaps the program explicitly counts the not-discounted value as real-time income and pays the taxes, or, perhaps as in the original article, the are common but not actually legal.
As I pointed out, this counsel is a top corp/tax attorney and professor in the region, he didn't say exactly what I said, but when I re-characterized it back to him, he said, 'it doesn't work that way, but it's not far off -- don't touch this stuff'.
You do what you want, but I'm listening to the expert.
(Possibly they were offering you options in your story--I'm not sure).
But if the company wants to give you stock directly--say for free! You would pay tax, as regular employment income, on the difference in value between what you pay (say $0) and the FMV.
Yup, exactly, it was indeed 409a penalties and options/deferred income.
Also right, if it's straight-up realtime income, and you declare the full arms-length exchange / full & fair market value (minus whatever you paid or have as basis), and pay tax on that, you're probably ok (but IANAL, this is not legal advice).
2. Employee Stock Purchase Plans where you buy company stock at a discount (tax free) are a thing https://www.plancorp.com/blog/the-untold-advantages-of-your-...