1 2 3 4 5 6 7 option which gives the employee additional benefits under the option, but such term shall not include a change in the terms of the option "(A) attributable to the issuance or assump tion of an option under subsection (a); or "(B) to permit the option to qualify under sections 422 (b) (6), 423 (b) (9), and 424 (b) (2). 8 If a restricted stock option is exercisable after the expira9 tion of 10 years from the date such option is granted, sub10 paragraph (B) shall not apply unless the terms of the option are also changed to make it not exercisable after 12 the expiration of such period. 11 13 14 15 16 17 18 19 "(i) CROSS REFERENCES. "For provisions requiring the reporting of certain acts with respect to a qualified stock option, options granted under employer stock purchase plans, or a restricted stock option, see section 6039." (b) ADMINISTRATIVE PROVISIONS. (1) REPORTING REQUIREMENT FOR CERTAIN OPTIONS.-Subpart A of part III of subchapter A of chapter 61 (relating to information returns) is amended by renumbering section 6039 as 6040, and by inserting after section 6038 the following new section: 1 ❝SEC. 6039. INFORMATION REQUIRED IN CONNECTION 2 3 4 tion 5 WITH CERTAIN OPTIONS. "(a) REQUIREMENT OF REPORTING.-Every corpora "(1) which in any calendar year transfers a share 6 of stock to any person pursuant to such person's exer cise of a qualified stock option or a restricted stock option, or "(2) which in any calendar year records (or has by its agent recorded) a transfer of the legal title of a share of stock "(A) acquired by the transferor pursuant to his exercise of an option described in section 423 (c) (relating to special rule where option price is between 85 percent and 100 percent of value of stock), or "(B) acquired by the transferor pursuant to his exercise of a restricted stock option described in section 424 (c) (1) (relating to options under which option price is between 85 percent and 95 percent of value of stock), 1 shall, for such calendar year, make a return at such time 2 and in such manner, and setting forth such information, as 3 the Secretary or his delegate may by regulations prescribe. 4 For purposes of the preceding sentence, any option which a 5 corporation treats as a qualified stock option, a restricted 6 stock option, or an option granted under an employee stock 7 purchase plan, shall be deemed to be such an option. A 8 return is required by reason of a transfer described in para9 graph (2) of a share only with respect to the first transfer 10 of such share by the person who exercised the option. 11 "(b) STATEMENTS TO BE FURNISHED TO PERSONS 12 WITH RESPECT TO WHOM INFORMATION IS FURNISHED.— 13 Every corporation making a return under subsection 14 (a) shall furnish to each person whose name is set forth 15 in such return a written statement setting forth such informa16 tion as the Secretary or his delegate may by regulations 17 prescribe. The written statement required under the preced18 ing sentence shall be furnished to the person on or before 19 January 31 of the year following the calendar year for which 20 the return under subsection (a) was made. 21 "(c) IDENTIFICATION OF STOCK.-Any corporation 22 which transfers any share of stock pursuant to the exercise 23 of an option described in subsection (a) (2) shall identify 24 such stock in a manner adequate to carry out the purposes 25 of this section. 1 2 3 4 5 6 "(d) CROSS REFERENCES.— "For definition of “(1) The term 'qualified stock option', see section 422(b). “(2) The term 'employee stock purchase plan', see section 423(b). "(3) The term 'restricted stock option', see section 424(b)." (2) PENALTIES FOR FAILURE TO FILE INFORMATION RETURNS.-Section 6652 (a) (relating to failure to file certain information returns) is amended to read as follows: "(a) RETURNS RELATING TO PAYMENTS OF DIVI7 DENDS, ETC., AND CERTAIN TRANSFERS OF STOCK.-In 8 the case of each failure to file a statement of 9 10 11 12 13 14 15 16 17 18 19 20 "(1) the aggregate amount of payments to another person required by section 6042 (a) (1) (relating to payments of dividends aggregating $10 or more), section 6044 (a) (1) (relating to payments of patronage dividends aggregating $10 or more), or section 6049 (a) (1) (relating to payments of interest aggregating $10 or more), or "(2) the transfer of stock or the transfer of legal title of stock required by section 6039 (relating to information in connection with certain options), on the date prescribed therefor (determined with regard to any extension of time for filing), unless it is shown that such 1 failure is due to reasonable cause and not to willful neglect, 2 there shall be paid (upon notice and demand by the Secre3 tary or his delegate and in the same manner as tax), by the 4 person failing to so file the statement, $10 for each such 5 statement not so filed, but the total amount imposed on the 6 delinquent person for all such failures during any calendar year shall not exceed $25,000." 7 (3) PENALTIES FOR FAILURE ΤΟ FURNISH STATEMENTS TO PERSONS WITH RESPECT TO WHOM RETURNS ARE FILED.-Section 6678 (relating to failure to furnish certain statements) is amended (A) by striking out "section 6042 (c)," and inserting in licu thereof "section 6039 (b), 6042 (c),"; and (B) by striking out "section 6042 (a) (1),” and inserting in lieu thereof "section 6039 (a), 6042 (a) (1),”. (c) TECHNICAL AMENDMENTS. (1) Section 402 (a) (3) (B) (relating to taxability of beneficiary of employees' trust) is amended by striking out "section 421 (d) (2) and (3)" and in serting in lieu thereof "subsections (e) and (f) of section 425". (2) The last sentence of subparagraph (B) of |