Employers must furnish employees who exercised incentive stock options ("ISOs") or sold or otherwise transferred shares acquired under an employee stock purchase plan ("ESPP") during 2008 with a detailed information statement by January 31, 2009.
As we reported in our July 23, 2008 blog article, a requirement that corporations additionally file such information in a return with the Internal Revenue Service ("IRS") was added in 2006. However, this obligation to file an information return with the IRS has been temporarily waived and is not required for applicable ISO/ESPP transactions that occurred in 2008. Note, however, that employers must continue to supply employees with the required annual information statements.
As we also reported in our July 23, 2008 blog article, in July 2008, the IRS issued proposed new regulations relating to the content of the employee information statements. However, for the information statements that are to be provided to employees by January 31, 2009, employers have the option of following the requirements of the current regulations or the proposed regulations. We think most employers will want to continue to follow the current regulations by virtue of their familiarity with these rules and because the proposed regulations entail enhanced disclosure.
For further information and sample information statements, please contact Gregory Schick at (415) 774-2988 or Michael Chan at (213) 617-5537.