IRS Issues Final Regulations Relating to Employee Stock Purchase Plans and the Reporting Requirements for Employee Stock Purchase Plans and Incentive Stock Options
In November 2009, the Internal Revenue Service (the “IRS”) issued final regulations relating to options granted under an employee stock purchase plan (“ESPP”) as defined under Section 423 of the Internal Revenue Code, as amended (the “Code”). These final regulations are effective as of November 17, 2009, but will only apply to ESPP options granted on or after January 1, 2010.
In addition, in November 2009, the IRS issued final regulations relating to the return and information statement requirements applicable to the exercise of options intended to qualify as “incentive stock options” under Section 422 of the Code (“ISOs”) and the transfers of stock acquired under an ESPP, pursuant to Section 6039 of the Code. These final regulations are also effective as of November 17, 2009, but will apply retroactively as of January 1, 2007.