amended by Section 403 of the Tax Relief and Health Care Act of 2006,
requires corporations to file an information return with the IRS, in addition
to providing employees with an information statement, following a stock
transfer. Returns required by §1.6039-1(a) of these final regulations
and information statements required by §1.6039-2(a) of these final
regulations must be made using Form 3921, Exercise of an Incentive
Stock Option Under Section 422(b). Returns required by §1.6039-1(b)
of these final regulations and information statements required by §1.6039-2(b)
of these final regulations must be made using Form 3922, Transfer
of Stock Acquired Through an Employee Stock Purchase Plan Under Section
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3921 - Exercise of an Incentive Stock Option (ISO) Under Section 422(b)
For each transfer made during the previous year, the employer
must provide to the IRS on Form 3921 the following:
Name, address and EIN of the company transferring the stock
The name, address and EIN of the company whose stock is being transferred
Name, address and social security number of the recipient of the stock
Date of option grant
Exercise price per share
Date of option exercise
Fair market value per share on the date of exercise
Number of shares transferred.
3922 - Transfer of Stock Acquired Through an Employee Stock Purchase
Plan (ESPP) Under Section 423(c)
each transfer made during the previous year, the employer must provide
to the IRS on Form 3922 the following:
address and social security number of the recipient
address and EIN of the company whose stock is being transferred
of option grant
market value per share on the grant date
price per share
of option exercise
market value per share on the date of exercise
the legal title to the shares was transferred
of full and partial shares that were transferred.
to participants for ISOs and ESPPs
Under the new law, statements still must be furnished to participants
with regard to both ISOs and ESPPs. These statements must be provided
by January 31, and it is anticipated that either delivery by mail or electronically
generally will be permitted.
deadlines to file Forms 3921 and 3922 with the IRS are February 28 for
paper filers and March 31 for electronic filers. The
deadline for distributing the statements to employees is still January
are required to file Forms 3921 and 3922 electronically if you have 250
or more returns to file with the IRS. This is a per-form requirement.
So if you have 251 Forms 3921 to file and only 249 Forms 3922, then you
only have to file the Forms 3921 electronically. Likewise, if you have
249 of each to file, then you don't have to file any of the forms electronically.
But you can always file electronically on a voluntary basis.
for Late Filings
per form if you file within 30 days of the deadline (maximum of $75,000
per form if you file by August 1 (maximum of $150,000 per year)
per form if you file after August 1 or never complete the filing (maximum
of $250,000 per year)
least $100 per form if the late filing or failure to file is due to
intentional disregard (no annual maximum). It could be very expensive
to intentionally disregard these filings.
addition, if you fail to distribute the employee statements, you can be
subject to an additional penalty of $50 per statement (maximum of $100,000
per year). The same penalty for intentional disregard applies--so if you
intentionally disregard both filing the return and distributing the employee
statement, then the minimum penalty is $200 per transaction with no maximum.