Under the attribution rules of 318(a)(4) stock in a company shall be considered owned by a person if they have an option to acquire it. Has anyone attempted to make an otherwise NHCE an HCE, by having the employer give them options to acquire stock?

Obviously, there appears to be a lot of smell test issues here, but I was just curious to what degree anyone has used this.

I've actually seen it done once - for the sole purpose, ostensibly at least, of creating a controlled group.

If the options are loaded with restrictions on exercise they can fall outside of the attribution rule.

You also bring into play state corporate law, as well as state and federal securities laws when you make stock option grants. You need to consider those issues as well as those relating to the retirement plan.