Bryan Adams said the Summer of 69 “were the best days of my life.” I don’t think anyone would say that handling 6039 compliance would be their best or most favorite part of their year-end to-do list, but it is something that has to be done to keep the IRS happy and your company compliant. If it’s only July, then why should you worry about it now? The answer to that question depends on your specific situation:
What is 6039: If you’ve never heard such words as 6039, Form 3921 or Form 3922, then this may be news to you so let me briefly explain. Since 2010, the IRS has required companies on an annual basis to provide a Form 3921 to any participants that have acquired shares through an Incentive Stock Option exercise (ISO) and a Form 3922 for any acquisition of shares through an Employee Stock Purchase Plan (ESPP). Companies are also required to report these to the IRS. The mailings to the participants need to be completed by Jan. 31st following the calendar year of the transaction and the IRS filing by March 31st.
Solution: Don’t panic! Depending on the size of your company and how many participants require reporting, most companies will outsource this to a vendor that does this for you. You should start talking to these providers in July and August to figure out pricing so that you can incorporate that cost into your budget and to understand the process better.
Existing 6039 clients: Most of you probably have done this in past years. If that’s the case, you may be covered for ensuing years by your existing vendor, but then again, you may not be covered. Now would be a good time to see if your contract from last year covers you for this calendar year and to see if your pricing is in line with the industry norm. You may also want to shop around for a better fit, based on your wish list for 6039. For example, if your current provider does not handle things like TIN matching, or is unwilling to include the 3921/3922 forms in a bigger, more comprehensive year-end packet to be sent to your participants, know that there are options for you in the marketplace.
Equity Point works with multiple vendors that provide 6039 services. We can help you understand the process better and attain quotes on your behalf. You have enough to do at year-end; let Equity Point take this pesky task off your plate.