A multibillion-dollar gap between what public companies book as expenses for their executives' stock options and what they report to the IRS under two sets of rules is costing the Treasury billions in lost revenue, a key senator says.

Companies continue to report deductions for stock options to the Internal Revenue Service that far exceed what they are accounting and disclosing to shareholders as hits against their bottom line, Sen. Carl Levin, D-Mich., said Wednesday. He released new IRS data showing that the total gap for corporations in 2008 was $52 billion.

To close the gap, Levin and Sen. John McCain, R-Ariz., have proposed legislation that would require that the tax deduction for stock options not exceed the expense for options reported in financial statements.