The IRS recently released Form 15620 (https://www.irs.gov/pub/irs-pdf/f15620.pdf), simplifying the process of making Section 83(b) elections. Previously, taxpayers making an 83(b) election had to submit their own written statement to the IRS, following the guidelines outlined in Rev. Proc. 2012-29.
Form 15620 is a welcome change. It is a standard and straight-forward form that allows taxpayers who receive unvested, restricted property like restricted stock or profits interests as compensation for services to file the 83(b) election and obtain the tax advantages. Because Section 83(b) elections can provide the taxpayer with significant tax savings, the IRS strictly construes the 30 day time-frame and the requirements for making the election.
Having encountered a number of instances where the 30-day window is missed or the 83(b) election does not conform to the Rev. Proc., we are thrilled to see the IRS standardize this process! While taxpayers can still submit their own election form, we would recommend advisors use Form 15620, which provides a standardized template that complies with Section 83(b).
A word of caution: while this new form is very straightforward, the rules governing profits interests and restricted stock can be complicated and you should seek experienced tax counsel to assist you. The tax team at Meliora Law, PLLC has significant experience with these issues- we have worked directly with clients issuing these interests and have collaborated with other corporate or legal advisors to achieve the desired tax consequences.
