As discussed in our December 16, 2010 blog article, the IRS issued final regulations in 2009 under Section 6039 of the Internal Revenue Code (the "Code") that require Employers to annually furnish each employee who exercised incentive stock options ("ISOs") or sold or otherwise transferred shares acquired under an employee stock purchase plan ("ESPP") during a year with a detailed information statement by January 31 of the following year. In addition, Employers must file an information return with the IRS by February 28 of the following year, or by March 15 for Employers filing electronically.
If in 2011 an employee exercised an ISO (i.e. a stock option described in Section 422 of the Code), the Employer must provide the employee with a written information statement by January 31, 2012. Form 3921 should be used, however, a substitute form may also be used so long as it contains the required information.
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