File the 83(b) election within 30 days of the stock transfer or the option is gone for good. The deadline sits in the statute itself, not in IRS discretion. What the election buys is timing: you report the spread once, at transfer, when founder stock is usually worth almost nothing, instead of at every vesting date afterward.
The caveat belongs right beside that. It is a bet, and losing it costs real cash. If the company fails and your unvested shares are forfeited, section 83 gives you no deduction for the income you already reported. Treat what follows as information about how the rules work, not as tax or legal advice.
What does an 83(b) election actually do?
It moves the taxable moment from vesting to transfer. The default rule taxes restricted stock as it vests, on the excess of fair market value at each vesting date over what you paid. The election taxes that same spread once, measured on the day the shares were transferred to you.
The statute defines the elected amount as "the excess of—(A) the fair market value of such property at the time of transfer (determined without regard to any restriction other than a restriction which by its terms will never lapse), over (B) the amount (if any) paid for such property," per 26 U.S.C. § 83(b)(1).
For a founder who buys restricted stock at incorporation at the price the board sets, that excess is often zero or close to it. The election then reports a small amount, or nothing, and later growth is not compensation income arriving in slices as the vesting schedule runs. The holding period of the shares also begins just after the transfer date when the election is made, under Treasury Regulation § 1.83-4(a).
How hard is the 30-day deadline?
Hard. Section 83(b)(2) says the election "shall be made not later than 30 days after the date of such transfer," and the regulation repeats the same 30-day rule, measured from the date the property was transferred. The regulation also permits filing before the transfer date, which is worth knowing when a closing date is set in advance.
There is one narrow softening. IRS Form 15620 states that an election is timely if the thirtieth day falls on a Saturday, Sunday or legal holiday and the election "is postmarked by the next succeeding day which is not a Saturday, Sunday or legal holiday." That is the whole of the flexibility. Nothing in section 83 gives the IRS a general power to accept a late election.
So the practical work is calendar work. Pin the transfer date the moment the stock purchase agreement is signed and the shares are issued, then count from that date rather than from the board consent, the wire, or the date the certificate arrives.
What has to be in the filing, and where does it go?
Since 2025 there is an official form for it. Form 15620, Section 83(b) Election (Rev. April 2025), replaces the self-drafted letter founders and their counsel used to assemble from the regulation's checklist.
That checklist still describes the content. Treasury Regulation § 1.83-2(e) requires the taxpayer's identifying information, a description of the property, the date of transfer and the taxable year, the nature of any restrictions, the fair market value determined without regard to lapse restrictions, the amount paid, and confirmation that copies were furnished to the other parties.
Delivery has three parts under the form's instructions. Mail the completed and signed form to the IRS office where the person performing the services files a federal income tax return. Send a copy to the company the services are performed for. If the person receiving the property is not the person performing the services, a copy goes to that transferee as well.
The step founders still get wrong: it does not go with your return
This one is a leftover habit. Final regulations issued in 2016 removed the requirement to attach the election to your tax return: under Treasury Decision document 2016-17591, "a taxpayer is no longer required to file a copy of a section 83(b) election with the taxpayer's income tax return." The rule applied to property transferred on or after January 1, 2016.
What replaced it is a recordkeeping duty. The same regulations require that a copy of the election "must be kept until the period of limitations expires for any return with respect to which the income inclusion or basis of the property is relevant," alongside the records showing the property's original cost.
Read together, those two rules explain why filing evidence matters. No one sends you a receipt confirming the election was accepted, so the copy in your files and whatever mailing proof you kept are the record you will be working from years later, when the shares are being sold and someone asks for basis.
Can you take it back?
Almost never. Treasury Regulation § 1.83-2(f) states that an election "may not be revoked except with the consent of the Commissioner," and consent is available only where the transferee made a mistake of fact about the underlying transaction, with the request submitted within 60 days of discovering the mistake.
The regulation closes the obvious escape route. A decline in the value of the property, or the transaction failing to perform as expected, is not a mistake of fact. Regret is not a ground for revocation.
Forfeiture is the other asymmetry. If you make the election and later forfeit shares while they are still substantially nonvested, the loss you can claim is limited to the amount you paid less anything recovered on the forfeiture — the income you already reported does not come back to you as a deduction, per § 1.83-2(a).
When is the election the wrong call?
When the spread at transfer is already large. The election accelerates income you must pay tax on now, in cash, on stock you cannot sell. A founder buying at formation and a fiftieth employee receiving restricted stock after two priced rounds are making very different bets with the same form.
| Election made | No election (default) | |
|---|---|---|
| When income is measured | Date of transfer | As the stock becomes substantially vested |
| Amount included | Value at transfer minus amount paid | Value at each vesting date minus amount paid |
| If shares are later forfeited | Loss limited to amount paid less amounts recovered; no deduction for income already reported | No compensation income was reported on the unvested shares |
| Holding period starts | Just after the transfer date | Not started by the transfer under § 83(b) |
| Reversible? | Only with the Commissioner's consent, for a mistake of fact, within 60 days of discovery | Nothing to reverse |
The sequence itself is short. Fix the transfer date, get the fair market value the board actually set, complete Form 15620, mail it to the office where you file and keep proof of mailing, give a copy to the company, and keep your copy through the limitations period. Six steps, one clock.
Then stop. The judgment call — whether the spread is small enough that the bet is worth making at all — belongs to you and a tax adviser who knows your numbers, because it cannot be unwound once the envelope is mailed.