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Tax Section 83 Election Form

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TAX SECTION 83 ELECTION (SECTION 83(b) ELECTION)

Taxpayer Identification

Taxpayer Name:

Entity Type

Select the entity type for the taxpayer (check all that apply):

Transfer Details

Date property was transferred:

Taxable year for which election is made:

Number of units/shares (if applicable):

Election Declaration and Certification

Pursuant to Section 83(b) of the Internal Revenue Code, I hereby elect to include in my gross income for the taxable year stated above the fair market value of the property described above notwithstanding any restrictions applying to such property. I understand that this election applies to the property described herein and that any future adjustments to tax liability remain subject to applicable law.

The undersigned certifies the following under penalties of perjury:

  1. Taxpayer Name:
  2. Taxpayer Identification Number: SSN or EIN
  3. Description of property:
  4. Date property transferred: ; Taxable year:
  5. Nature of restrictions:
  6. Fair market value at transfer (without regard to restrictions): $ ; Amount paid: $
  7. I acknowledge that a copy of this election has been furnished as required to the person for whom the services were performed and that a copy will be attached to the taxpayer's federal income tax return for the taxable year indicated above.
  8. Under penalties of perjury, I declare that I have examined this election, and to the best of my knowledge and belief, it is true, correct, and complete.

Attachments and Delivery

Check the items that apply and indicate the date each copy was delivered or attached:

  Date attached:

  Date furnished:

Taxpayer Name:

Signature:

Date:

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What the Tax Section 83 Election Form Is

The Tax Section 83 Election Form documents an IRC §83(b) election, a taxpayer's choice to include the fair market value of property transferred for services in income at the time of transfer rather than when restrictions lapse. Commonly used for restricted stock or property subject to substantial risk of forfeiture, the election must be a written statement signed by the taxpayer and filed with the IRS within thirty days of the transfer date, with copies provided to the payer and kept with the taxpayer's records for audit purposes.

Why Filing an 83(b) Election Matters

An 83(b) election can accelerate taxable income to the grant date, potentially reducing total tax when property value is low; it also fixes the tax basis date for future capital gains treatment, but carries the risk of paying tax on property later forfeited.

Why Filing an 83(b) Election Matters

Who Typically Uses the Tax Section 83 Election Form

Common users include founders, employees, and service providers who receive restricted equity or property in exchange for services.

  • Founders and early-stage equity recipients at startups and LLCs receiving restricted shares or interests
  • Employees receiving restricted stock units, restricted common stock, or property tied to service vesting
  • Contractors and consultants granted property as compensation where restrictions or forfeiture risk apply

Tax advisers and company payroll departments also handle distribution, filing, and recordkeeping for the election.

Step-by-Step: Completing and Filing the Election

Follow these sequential steps to prepare, sign, and file a valid IRC §83(b) election within the required timeframe.

  • 01
    Prepare Election: Draft a written statement that meets IRC §83(b) content requirements.
  • 02
    Sign and Date: Sign the election and date it on the transfer date or thereafter within 30 days.
  • 03
    File with IRS: Mail or deliver the original to the IRS within 30 days of the transfer (IRC §83(b)).
  • 04
    Provide Copies: Give a copy to the employer/payer and retain a copy with your tax records.

Configuring an Online Workflow for the Election

Set up an e-filing workflow that secures signatures, stamps dates, and stores proof of service for audits.

Field | Recommended Setting Field Name | Recommended Setting
Delivery Email with PDF attachment and download link
Authentication Email link plus optional SMS code
Retention Store signed PDF plus audit trail
Template Save as reusable template for consistency

Digital Signing and eSubmission Requirements

Use a platform that produces tamper-evident signed PDFs and captures an auditable completion record.

  • Formats supported: PDF, DOCX, HTML
  • Integrations: NetSuite, Salesforce, Google Workspace
  • Authentication: Email, SMS, advanced options

Ensure the chosen platform complies with ESIGN (15 U.S.C. §7001) and UETA where applicable, provides an audit trail with timestamps and IP addresses, and retains records in a searchable, exportable format for the required retention period.

Where to Send the Signed Election and Copies

Know who receives the original, who gets copies, and what you should retain for audit purposes.

  • Original to IRS: File the original election with the IRS within 30 days.
  • Copy to Employer: Provide a copy to the payer or employer for payroll records.
  • Attach to Tax Return: Retain and attach a copy to your income tax return when filed.
  • Retain Proof: Keep proof of mailing, delivery, and signed copy for audits.

Key Deadlines and Filing Expectations

Timely filing is the central compliance requirement; missing dates generally invalidates the election and changes tax timing.

30-Day Filing Window:

File the election within 30 days of the transfer date (IRC §83(b)).

Provide Employer Copy:

Deliver a copy to the payer promptly after filing the original.

Attach to Return:

Retain and include a copy with your income tax return as evidence.

No IRS Fee:

There is no separate IRS filing fee for an IRC §83(b) election.

Keep Proof Long-term:

Preserve proof of filing for at least the IRS retention period.

Milestone Timeline for an 83(b) Election

Follow this sequential milestone timeline to meet filing, delivery, and recordkeeping obligations.

01

Transfer Occurs

Date property is transferred to taxpayer; triggers the 30-day clock.

02

Prepare Election

Draft the statement describing property and election details.

03

File with IRS

Mail or deliver the original within 30 days of transfer.

04

Retain and Distribute

Provide copies to payer and keep originals with records.

Common Preparation Mistakes to Avoid

  • Missing the 30-day deadline is the most frequent fatal error; late filings are generally not accepted by the IRS.
  • Providing an incomplete property description or using ambiguous identifiers makes the election vulnerable to IRS challenge.
  • Entering incorrect TINs, names, or dates can trigger notices, backup withholding, or mismatched reporting against employer filings.
  • Failing to keep proof of mailing or to give a copy to the payer complicates audit defense and verification.

Penalties and Practical Risks

Late Filing: Election invalid
Irrevocability: Election generally cannot be revoked
Forfeiture Risk: Tax paid may be lost if property forfeited
No Automatic Refund: IRS rarely refunds taxes paid due to forfeiture
Reporting Errors: Incorrect entries trigger penalties
Audit Exposure: Improper elections increase audit scrutiny

eSignature Vendor Pricing Snapshot for Filing and Storing the Election

Compare common platform pricing and core capabilities relevant to signing, storing, and delivering a signed IRC §83(b) election; signNow is listed first per product comparisons.

signNow DocuSign Adobe Sign PandaDoc HelloSign
Starting Price $8/user/mo $15/user/mo $14/user/mo $19/user/mo $15/user/mo
Free Trial 7-day free trial Varies Varies Varies Varies
Bulk Send Yes Yes Yes Yes No
Audit Trail Yes Yes Yes Yes Yes
HIPAA Compliant Yes Yes Yes No No

Essential Data Elements Required on the Form

Taxpayer Name: Full legal name
TIN: SSN or EIN
Property Description: Clear identifier of property
Transfer Date: MM/DD/YYYY format
Statement of Election: Explicit IRC §83(b) language
Signature: Signed and dated by taxpayer

Key Components of a Professional 83(b) Election Statement

A complete, professional election contains several discrete elements that together satisfy IRS expectations and support defensible tax reporting.

Clear Election Statement

A concise sentence invoking IRC §83(b) that explicitly notifies the IRS of the taxpayer's election to include the property in income as of the transfer date.

Complete Property Description

Identify shares, units, certificate numbers, number of shares, and any other unique identifiers so the property is unmistakably described for reporting and audit purposes.

Transfer and Vesting Dates

Include the exact transfer date and any vesting schedule or substantial risk of forfeiture to document the timing and conditions of the grant.

FMV Statement

State the fair market value per share or unit at transfer, and note if a valuation method or third-party appraisal was used for the determination.

Taxpayer Identification

Provide the taxpayer's SSN or EIN and full mailing address to ensure the IRS can associate the election with the correct return and taxpayer account.

Signature and Filing Proof

Signed and dated original for IRS filing, plus contemporaneous proof of mailing or delivery and copies provided to payer and retained by taxpayer.

Realistic Filing Examples and Outcomes

Two concise examples illustrate common scenarios and practical consequences when filing an IRC §83(b) election.

Early Founder Example

Founder receives 100,000 restricted shares at nominal value

  • Files 83(b) within 30 days to fix ordinary income at grant date
  • Result: lower initial tax and capital gain holding period begins at grant, but tax paid if shares are later forfeited.

Early Employee Example

Employee granted restricted stock with multi-year vesting

  • Elects under IRC §83(b) within 30-day window
  • Result: establishes cost basis immediately and may reduce ordinary income if shares appreciate, subject to forfeiture risk.

Frequently Asked Questions and Troubleshooting

Answers to common questions about timing, filing, e-signing, and consequences help clarify compliance choices and practical next steps.


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