The IRS recently released a new optional Form 15620 that taxpayers can use to make a Section 83(b) election. The IRS had not previously provided an official form for making the written statement required under Section 83(b), and had instead offered only a sample election statement in Rev. Proc. 2012-29.
Section 83(b) allows taxpayers receiving property for services (such as restricted stock) to elect to include the fair market value of the property in income (net of any amount paid) when it is received rather than when it is no longer subject to a substantial risk of forfeiture. The election is commonly made if the value of the restricted stock or other property is likely to increase substantially before it vests (when income would normally be recognized).
In order to make a valid Section 83(b) election, the service provider must file an election statement with the IRS within 30 days after the property transfer and provide a copy of the election to the employer that transferred the property. Taxpayers can now use new Form 15620 to file this election statement, though it is not required. They can continue to use the sample statement in Rev. Proc. 2012-29 or another statement that includes all of the information required under the applicable regulations (see IRS Regulations Section 1.83-2(e)),
Form 15620 generally follows the regulatory requirements for the statement, but adds two new additional items not included in the sample statement under Rev. Proc. 2012-29.
First, new Form 15620 requires service providers to include the name, TIN, and address of the service recipient — that is, the employer or person for whom the person making the Section 83(b) election is providing services in connection with the transfer of property. Second, new Form 15620 is required to be signed by the service provider “under penalty of perjury” with a declaration that, to the best of the service provider’s “knowledge and belief, the information entered on this Form 15620 is true, correct, complete and made in good faith.”
In addition, consistent with the current Section 83(b) election procedures, new Form 15620 must be filed by mail with the same IRS office where the service provider files their federal income tax return. To ease the election filing requirements, the IRS has made new Form 15620 downloadable and fillable in a PDF format).
Although a Section 83(b) election cannot currently be filed with the IRS electronically, the IRS may be likely to allow or require service providers to file a Section 83(b) election electronically at some point in the future.
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