Reporting of ISO and ESPP Stock Issuance Required in 2010

New Treasury regulations were just issued requiring employers to file an information return with the IRS (in addition to providing information to the employee) regarding stock issued to the employee upon the exercise of an incentive stock option (ISO) or an employee stock purchase plan (ESPP).  While information to the employee has been required since 2007, the information to the IRS has been postponed until 2010.  The IRS will develop new Form 3921 for ISOs and new Form 3922 for ESPPs, effective for stock transfers after 2009.  The objective of the new form is to provide sufficient information to enable the employee to calculate their tax obligations.  The information to be reported includes the name and tax identification number of the employee and the corporation, the dates the option was granted and exercised, the exercise price per share, the fair market value per share on the date of exercise, and the number of shares transferred to the employee pursuant to the exercise of the option.  For an ESPP, additional information pertaining to the fair market value of the stock on the date of grant of the option is required.