"So what happens in the event an independent contractor is accidentally granted ISOs? The response from the listserv was that, generally speaking, because ISOs and NQOs are tax treatments, the options granted are really only NQOs, since the IRS will not recognize ISOs treatment for options granted to an independent contractor."
It appears a bunch of lawyers from a listserv back in 2013 have stated this must be treated as an NQO, "since the IRS will not recognize ISOs treatment for options granted to an independent contractor"
If this is the case, I'd rather stay on the safe side and report it as an NQO.
