RSU and Form 1099-B

Is it possible that a taxpayer has RSU from his employment in 2019. But he does not have a 2019 Form 1099-B?

I suppose RSU stocks would have been sold by his employer, part of the proceeds were paid to him and part of the proceeds were used to pay for the tax withholding. If that is the case, there must be a Form 1099-B since the stocks were sold. Is my thinking correct?

But taxpayer insists there was no Form 1099-B.

First are you sure they are Restricted Share Units? and not Restricted Shares? (a unit is a phantom equivalent of a share for executive compensation purpose).

Typically a RSU plan is cash settled so the withholdings are effected when the $ equivalent of the value of the phantom share-equivalent is released. In that case no shares are sold. That's probably why you won't get a 1099-B.

If however it is a true RS plan then yes typically shares are sold upon release to cover the withholding requirement of the employer.

Each plan is wildly different so that's as far as I will go with "generalities"...
(and the above assumes no 83(b) election for RS).

A strict “RSU” is a Restricted Stock Unit. It is not an actual share of restricted stock. When the restrictions lapse, you don’t end up with stock. It’s a phantom-like thing that simply pegs to the value of the stock, but doesn’t settle in stock. It is basically deferred comp. Typically, when it vests, you have an event for FICA purposes under the special timing rule. When it is ultimately paid out/settled in cash, then you have your income tax consequence.

Compare and contrast to a strict “RSA” – which is an Award of actual stock (i.e. property) that is restricted. Sec 83 applies since it is actual property.

Look at it this way – With an RSU, the employer is basically saying, “We’re going to pay you a cash bonus later on. We’ll calculate it this way: X hypothetical shares times whatever the share price is on Date Y.”

That's probably why you won't get a 1099-B

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Agreed. +1