This is confusing. My employer was told by their CPA that they did not have to issue a 1099B for stock the shareholders sell back, because their business is not selling stock (they are not a broker), but I think the income needs to be reported by the shareholder who sold the stock. Am I correct? I know some employee shareholders who are tempted not to because there was no 1099B. Thanks for you help in advance.

Legally, if you sold a capital asset (and stock IS a capital asset), the sale and the resultant gain or loss must be reported on Schedule D.