Employers Must Begin Reporting ISO Option Exercises To IRS
Historically, the Internal Revenue Code of 1986, as amended (the “Code”) required corporations to provide an annual informational statement to each employee acquiring stock pursuant to the exercise of an incentive stock option (“ISO”) or under an employee stock purchase plan (“ESPP”). Congress changed this rule back in 2006 to also require employers to file an information return with the IRS. (Specifically, the Tax Relief and Health Care Act of 2006 amended Section 6039(a) of the Code.)
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