Where to Send Your 83(b) Election to the IRS

An 83(b) election is a formal notification sent to the Internal Revenue Service (IRS) regarding property received for services, such as restricted stock. This election allows an individual to be taxed on the property’s fair market value at the time it is granted, rather than when it vests. The decision to make this election is governed by a strict 30-day deadline from the date the property is transferred. Missing this window can have significant tax implications, making timely filing a priority.

Preparing Your 83(b) Election Package

The first step involves gathering specific information required for the election. You will need your name, address, and Taxpayer Identification Number. You must also provide a clear description of the property, such as the number of shares of stock, the date the property was transferred to you, and the taxable year for which you are making the election. The statement must also detail any restrictions on the property, its fair market value at the time of transfer, and the amount, if any, you paid for it.

The IRS does not provide an official form for this election, so you must draft a letter containing all the required elements. This letter serves as your formal election statement and should explicitly state that you are making an election under Internal Revenue Code Section 83(b).

Including a simple cover letter with your election is a good practice. This brief letter should state that a Section 83(b) election is enclosed. Before mailing, it is important to make several copies of both the signed election letter and the cover letter for your employer and your own records.

Submitting the Election to the IRS

The 83(b) election must be filed at the IRS service center where you file your annual federal income tax return. These addresses vary by state and can change, so to find the correct mailing address, you should consult the official IRS website’s “Where to File Paper Tax Returns” page. It is not sent to a local IRS office or the main headquarters.

When mailing the package, using USPS Certified Mail with Return Receipt is strongly recommended. This service provides a postmarked receipt at the time of mailing, which serves as legally recognized proof of the sending date. This proof is important for demonstrating compliance with the 30-day deadline. After the IRS receives the letter, the post office will mail you back a signed card as confirmation of delivery.

Post-Filing Obligations

After you have mailed the election to the IRS, a few additional steps are required. You must provide a copy of the filed 83(b) election letter to the company that granted you the equity. This ensures the employer is aware of your tax election and can handle its own reporting correctly.

Finally, it is important to maintain thorough records. Keep a copy of the signed election letter, the cover letter, your certified mail receipt, and the return receipt card you get back in the mail. These documents should be stored with your personal tax records.