Instructions for Filling Out Form 3922

This article offers a concise overview of the IRS document "Instructions for Forms 3921 and 3922 (10/2017)," which provides detailed guidance on completing Forms 3921 and 3922. It covers filing requirements, step-by-step instructions for each form, and links to additional IRS resources.

In this article, we'll focus on Form 3922 and provide a step-by-step guide on how to fill it out, ensuring you have all the information you need to complete the form accurately.

What is Form 3922?

Form 3922 is a tax form used by corporations to report the first transfer of legal title of a share of stock acquired by an employee (the transferor) through the exercise of an option granted under an employee stock purchase plan, as described in section 423(c). The purpose of this form is to ensure accurate reporting of the transfer of legal title of the shares. The corporation whose stock is being transferred is responsible for filing Form 3922, and a return is only required for the first transfer of legal title by the transferor. Shares of stock transferred as a result of exercising the option must be identified in a manner that enables accurate reporting of the transfer.

Who Must File Form 3922?

Corporations are required to file Form 3922 if, in any calendar year, they record or have an agent record a transfer of legal title of a share of stock acquired by the transferor (the person who acquires the shares through exercising an option) under an employee stock purchase plan described in section 423(c). This applies when the exercise price is less than 100% of the stock's value on the date of grant, or when the price is not fixed or determinable on the date of grant. In such cases, the corporation must file Form 3922 for each transfer made during that year.

Form 3922 Tax Filing Deadlines and Due Dates

The due dates for Form 3922 are as follows:

• January 31: Furnish a copy of Form 3922 to the employee (transferor).
• February 28: Paper file Form 3922 with the IRS (if not filing electronically).
• March 31: Electronically file Form 3922 with the IRS.

Form 3922 Late Payment Penalty

There is not explicitly mentioned late payment penalty for Form 3922, though it is important to be aware that the IRS may impose penalties for late filing or failure to furnish the required information. To avoid potential penalties, it is crucial to adhere to the specified due dates for furnishing Form 3922 to the employee and filing it with the IRS, as mentioned in the previous sections.

Step-by-Step Instructions for Form 3922

The step-by-step instructions for filling out Form 3922 are as follows:

1. Enter the name, address, and Taxpayer Identification Number (TIN) of the person who transferred the shares (the transferor).
2. If you have multiple accounts for a transferor for whom you are filing more than one Form 3922, an account number is required. The IRS also encourages you to designate an account number for all Forms 3922 that you file.
3. Enter the date the option was granted in Box 1.
4. Enter the date the option was exercised in Box 2.
5. Enter the fair market value (FMV) per share of stock on the date the option was granted in Box 3.
6. Enter the FMV per share of stock on the date the option to purchase the stock was exercised in Box 4.
7. Enter the price paid per share on the date the option was exercised in Box 5.
8. Enter the number of shares to which legal title was transferred in Box 6.
9. Enter the date legal title of the shares was first transferred in Box 7.
10. If the exercise price per share was not fixed or determinable on the date of grant entered in box 1, enter the exercise price per share determined as if the option was exercised on the date of grant entered in box 1 in Box 8. If the exercise price per share is fixed or determinable on the date of grant entered in box 1, then leave box 8 blank.

How to Submit Form 3922

To submit Form 3922, ensure that you accurately fill out all required information, including the employee's name, address, and Taxpayer Identification Number (TIN). If multiple accounts exist for a transferor, an account number is required. Enter accurate dates for when the option was granted and exercised, as well as the fair market value per share on these dates. The IRS encourages filers to designate an account number for all Forms 3922 that they file.

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