IRS RELEASES NEW 83(b) ELECTION FORM

On November 7^th, 2024, the IRS released Form 15620 as the standardized form for taxpayers making the Section 83(b) election. This election allows taxpayers to pay taxes on the fair market value (FMV) of certain property, such as restricted stock and options, received in connection with the performance of services on the grant date. Prior to the release of the new form, the IRS accepted either the sample election provided in the Rev. Proc. 2012-29 or a written statement that satisfied the requirements of Section 1.83-2. 

Form 15620 provides a standardized format that clearly and precisely outlines the service provider, service recipient (optional), and the property’s value at the time of transfer.

What’s new?

The IRS has added an optional section for the taxpayers to provide the following information about the service recipient for whom the taxpayer is providing services in connection with the transfer of property: 

1. Name
2. Address
3. Taxpayer Identification Number (TIN)

The following remain unchanged:

1. Taxpayers must make the election no later than 30 days after the date the property is transferred
2. The completed and signed election must be mailed to the IRS office where the service provider files their federal income tax return, and a copy must be provided to the service recipient
3. Provide the taxpayer’s name, TIN, and address
4. Provide the description and quantity of the property
5. Specify the date the property is transferred
6. Indicate the taxable year for which the election is made
7. Provide a description of applicable restrictions on the property
8. Provide the fair market value (FMV) of the property at the time of transfer (value per item multiplied by quantity)
9. Provide the total amount paid (if any) of the property (price paid per item multiplied by quantity)
10. Provide the total amount (if any) to be included in gross income (FMV minus total price paid).
11. Revocation of the Section 83(b) election may be permitted with IRS consent

Form 15620 is optional and not required by the IRS therefore, taxpayers may continue using the sample election or a written statement.