November 20, 2024

On November 7, 2024, the Internal Revenue Service ("IRS") introduced Form 15620, which standardizes elections under Section 83(b) of the Internal Revenue Code of 1986, as amended (the "Code"). This form allows taxpayers to accelerate taxation on unvested property received in connection with services rendered.

Previously, the IRS required taxpayers to submit a Section 83(b) Election via a self-drafted letter following guidelines in IRS Rev. Proc. 2012-29 or Treas. Reg. § 1.83-2. However, this process carried the risk of invalid elections due to missing required information. While self-drafted letters remain an option, Form 15620 helps to standardize the process and reduces the likelihood of errors.

Taxpayers should note that Form 15620 does not alter the existing requirements of Treas. Reg. § 1.83-2 for making Section 83(b) Elections. These include the necessity to (i) file the election no later than 30 days after the transfer of the property, and (ii) send copies of the election by certified mail to the IRS office where the taxpayer files their return and to the person for whom the services were performed (as well as to the transferee, if different from the service recipient).

While electronic filing of Form 15620 is anticipated in the future, taxpayers must currently submit it by mail.