When the Tax Cuts and Jobs Act went into effect in December 2017, so did an IRS tax code provision, Section 83(i), that allows the deferral for up to five years of federal income tax by employees who exercise a company’s stock options or vest restricted stock units, also known as RSUs, if the options or RSUs were offered to 80 percent of eligible workers.

According to Law360 Tax Authority, initial guidance in early December allowed companies to opt out of the deferral program and separately said employers cannot use equity granted in prior years to meet the deferral condition that grants of qualified stock must be made to no less than 80 percent of a corporation’s employees in the U.S. per calendar year.

But Pillsbury’s Michael Kosnitzky tells Law360 that few companies are taking advantage of the provision, thanks to burdensome administrative obligations and a requirement that the employer continue to withhold Federal Insurance Contributions Act, or FICA, taxes. Moreover, he says, those conditions are statutory and thus require legislative action—they cannot be addressed by the IRS and the U.S. Treasury.

“The big problems aren’t those little nits that have been cured in this go-around but the bigger problems with the 80 percent participation rule, the timing with having to pay the tax, the FICA taxes … and the withholding tax is also problematic, and all require a legislative fix,” Kosnitzky said. “All of those things make it undesirable to use, and that’s why people aren’t using them. Treasury believes that is nothing they can fix, and they’re right.”