The NASPP Blog

It’s April already, and in spite of the sneezing and wheezing of spring allergies in full force all around me, I couldn’t help but notice that we’re less than two weeks away from tax filing deadline day. April 17th is just around the corner. (Yes, if you’re late in starting your tax return, it is due on April 17th this year; April 15th falls on a Sunday and April 16th is a holiday in Washington, D.C., so that gives filers until April 17th to file their returns.) I’ve been wondering how stock plan administrators are faring this tax season. With the new Schedule D, 1099-B cost-basis reporting, and additional new IRS forms, I’ve felt certain there would be volumes of employee questions.

Do People Really Procrastinate?

There is an abundance of statistics on taxpayer filing habits; many land near a 40% figure as the number of taxpayers who file their tax returns during the last two weeks before the deadline. When I worked on the issuer side of the industry, I recall planning for those first two weeks in April to be filled with last minute participant questions. So I ask: are the questions pouring in this year? If so, I offer some last minute survival strategies for making it through one of our more complex tax seasons (from an equity compensation perspective, of course!) in recent years.

Have Resources Available to Answer the Phone/Email

Even if you’re sure you’re not going to pass out tax advice; even if you’re certain that the broker can answer all of their 1099-B questions, if you had significant transaction activity resultant from your stock plans in 2011, expect that a fair number of those participants have not yet filed their tax returns and they will emerge at the last minute. There’s an expression that I’ve heard often: “Failure to Plan on Your Part Does Not Constitute an Emergency on My Part.” Well, yes, that’s a fair argument. Yet in reality, we know participants are going to have questions. Rather than taking a stand against procrastination, sometimes it’s better to just accept that these things are going to happen and plan accordingly. Look at your volume of activity during 2011, and if it was minimally significant or more, make sure you have a plan in place for someone to answer that participant call. When up against a deadline, nothing is worse than getting voice mail or sending an unanswered email.

Anticipate, Anticipate, Anticipate!

We’re nearing the end of tax season, so hopefully you’ve already gained some flavor for what participants are asking about this year. It’s been a complex tax reporting season from a stock plan perspective, so anticipating hot button questions and having a ready response will help both sides: you with managing the inquiries, and participants with getting what they need quickly. One great trick I heard about (and tested myself once upon a time) can be applied to your email inbox. You can come up with a list of the top 10 questions that you think participants will email about, and then prepare an “auto reply” that lists the top 10 questions and answers. When the participant emails in a question, they will automatically receive the auto-reply. In many cases, the participant may find their answer in the auto-reply and won’t have to wait for you to respond individually to their email. I would suggest that you still respond, but knowing that in many cases the employee could potentially get the information even faster via the auto reply can go yards in assisting employees during peak periods. Keep in mind you don’t have to necessarily answer “tax” questions; sometimes the employee is just looking for a next step or other resources. Something as simple as a question/answer that addresses where they can find more information on a particular topic can be helpful.

I wish you all smooth sailing through the last couple weeks of tax season.

-Jennifer