New Incentive Stock Option and ESPP Regulations Issued
The law has changed regarding reporting of incentive stock option exercises. It used to be that issuers were only required to give optionees an information statement, but not report the exercise to the IRS. Now reporting to the IRS is required.
You can read the new regulations here.
"As amended by the Act, section 6039 requires corporations to file an information return with the IRS, in addition to providing employees with an information statement, following a stock transfer. The time and manner for filing a return with the IRS, as well as the information to be contained in the return and furnished to employees, is addressed in these proposed regulations. Section 6039, as amended by the Act, applies to stock transfers occurring on or after January 1, 2007. However, in Notice 2008-8, 2008-3 IRB 276 (December 19, 2007) (see Sec. 601.601(d)(2)(ii)(b)), the IRS waived the obligation to file an information return for 2007 stock transfers governed by section 6039."
