This article discusses both the recently issued, final regulations dealing with the inclusion of costs of employee stock options in cost sharing pools, and the proposed regulations dealing with the pricing of intercompany services. The authors describe the history of the US cost sharing regulations, and the current position of the IRS and taxpayers regarding the inclusion of the costs of stock-based compensation. The regulations may substantially increase the costs to be shared when companies issue significant amounts of stock options to their employees. The authors point out that in their opinion the change regarding the application of the comparable profits method is the most far-reaching change.