The IRS recently issued Revenue Ruling 2014-18, addressing the application of certain anti-deferral provisions of the Internal Revenue Code to nonqualified stock option and stock appreciation right plans (together, Option Plans). See “Are Compensatory Options on Offshore Hedge Fund Shares Subject to the Anti-Deferral Provisions of Internal Revenue Code Section 457A?,” Hedge Fund Law Report, Vol. 7, No. 23 (Jun. 13, 2014). In a guest article, Philip S. Gross and James D. McCann, both Members of Kleinberg, Kaplan, Wolff & Cohen, P.C., discuss some of the potential benefits and detriments of Option Plans from the perspectives of hedge fund managers and investors, and the potential impact of the Revenue Ruling on hedge fund manager taxation, structuring and compensation practices.