WASHINGTON (Bloomberg) - US corporations that gave stock options to executives claimed tax deductions in 2008 that were $52 billion higher than the costs they reported to shareholders, a US senator said.

Michigan Senator Carl Levin, who has been trying to pass legislation to limit tax deductions for stock options since 1997, said the difference between the deductions and expenses increased by $4 billion from 2007. He said the numbers were released by the Internal Revenue Service.

"Current stock option accounting and tax rules are out of kilter," Levin said in a statement. He said companies "benefited from an outdated and overly generous stock option tax rule that produces tax deductions that often far exceed companies' reported expenses. It's a stock option tax break we can no longer afford and ought to end."

Levin's legislation would limit tax deductions that companies claim on tax filings to the amount they report as an expense to shareholders. He previously introduced versions of the bill in 1997, 2003 and 2007.

Current rules allow companies to report different stock option expenses to the IRS than they do to investors. An option provides the right, but not the obligation, to buy or sell a specific amount of stock at a set time.

Levin's proposal would also subject stock options to rules limiting to $1 million the amount of employee compensation that can be deducted. Performance-based pay, including stock options, currently is exempt from the cap.

Levin said his Permanent Subcommittee on Investigations found that hundreds of companies are benefiting from a gap between new accounting rules that require companies to report stock options to shareholders as an expense when granted and 41-year-old tax rules that let them deduct any gains when the options are exercised.

Levin estimated his bill would generate as much as $15 billion in revenue annually.