Section 423(c) pertains to stock 'options'
I could certainly be wrong, but I don't think a ESPP (at least not the one I participated in) is considered to be a type of option.
Employee stock purchase plans tend to be viewed as a benefit while stock options are a form of compensation. ... Your ESPP will have set offering and purchase periods, while a stock option grant has a set term in which you can exercise the options after they vest.
It is you who decides whether to participate in your company's ESPP (depending on the employee eligibility provided by your company's type of plan). With a stock option plan, the company decides whether you participate.
https://www.mystockoptions.com/content/how-does-an-espp-differ-from-a-stock-option-plan
Here's how mine worked.
A % of your choosing, is held every week. On the last trading day of the 1/4 the total amount is used to purchase shares at a 15% discount.
In my case, we had to hold them a minimum of 2 years. Hypothetical: At the end of the 1/4, $1000 has been withheld from my check. The last day of the quarter, shares close at $35.31 Subtract 15% and my purchase price is $30.01
1000 divided by $30.01 = 33.32 shares purchased.
If 2 years later, shares were trading at $40.01 & I chose to sell, I'd have LTCG of $333.13
I only sold shares one time. I'm guessing that was around 2007. I think I sold 75 shares. I've never used anything more than TurboTax deluxe, and it seems like I got through it OK. Of course things could've changed since then.
More information on taxes & ESPP if anyone's interested.
https://www.hrblock.com/tax-center/income/investments/employee-stock-purchase-plan-taxes/
https://turbotax.intuit.com/tax-tips/investments-and-taxes/employee-stock-purchase-plans/L8NgMFpFX