The 83(b) Election Runs on a 30-Day Clock the IRS Will Not Reset

A Section 83(b) election is a short tax filing that tells the IRS to treat unvested equity as taxable on the day it is transferred rather than on the day it vests. Founders and early employees use it to fix the tax bill while the stock is worth almost nothing. The statute allows 30 days, and it does not stretch.

That deadline is the entire mechanism. Everything else about the election — the arithmetic, the paperwork, the downside — follows from the fact that the window opens at the transfer date and closes 30 days later.

The rule is old, the form is new. The IRS did not publish a dedicated form for the election until 2024; the current revision of Form 15620 is dated April 2025 and carries OMB number 1545-0074, according to the form itself. Before that, filers wrote their own statement.

What does Section 83 actually say?

Under the default rule, equity subject to a vesting schedule is taxed as it vests. Section 83(a) of the Internal Revenue Code pins the income event to the moment the recipient's rights become "transferable or are not subject to a substantial risk of forfeiture, whichever occurs earlier," per the statutory text.

Section 83(b) is the opt-out. It lets the recipient include in income, at transfer, the excess of the property's fair market value over the amount paid for it — the spread on day one instead of the spread at each vesting date.

For a founder who buys restricted stock at its formation-stage price, that spread is frequently zero or close to it. The election converts what would have been years of ordinary income at rising valuations into a single, near-zero inclusion.

The timing language is explicit. The election "shall be made in such manner as the Secretary prescribes and shall be made not later than 30 days after the date of such transfer," the statute states.

Why is the 30-day clock so unforgiving?

Because the regulation restates it and provides almost no relief valve. 26 CFR 1.83-2 requires that the election be filed no later than 30 days after the property was transferred, and permits filing before the transfer date as well.

Revocation is narrower still. Under the regulation, an election cannot be revoked without the Commissioner's consent, and that consent is limited to cases where the transferee acted under a mistake of fact about the underlying transaction, with the request due within 60 days.

The regulation is direct about what does not qualify: a decline in the property's value, or a mistake about its valuation, is not grounds for revocation. An election made on stock that later craters stays made.

There is exactly one piece of calendar mercy. Where the 30th day falls on a weekend or legal holiday, the election is treated as timely if it is postmarked by the next day that is not a Saturday, Sunday or legal holiday, per Rev. Proc. 2012-29 and the instructions on Form 15620.

What does the filing actually require?

Less than founders expect, which is part of why missed deadlines are so avoidable. Form 15620 asks for the taxpayer's name, taxpayer identification number and address; a description of the transferred property; the transfer date; the applicable restrictions; the property's fair market value; any amount paid; and the resulting gross income figure, according to the form.

The regulation asks for substantially the same list, plus the taxable year and, for elections made after July 21, 1978, confirmation that copies were distributed.

The distribution step is the one people skip. Both the regulation and Form 15620 require a copy to go to the person for whom the services were performed — the company — and, if different, to the transferee of the property.

1. Fix the transfer date. The 30 days run from that date, not from the board consent, the signature date on the purchase agreement, or the day the wire clears.
2. Complete Form 15620, or a statement matching the sample language in Rev. Proc. 2012-29, which the IRS offers as a template rather than a requirement.
3. Sign it, and submit it to the IRS office with which the person performing the services files a federal income tax return, as the April 2025 form instructs.
4. Deliver a copy to the company, and to the property transferee if that is someone else.
5. Keep proof of mailing. The postmark is what the weekend-and-holiday rule turns on.

What does the election do to basis and holding period?

It starts the capital gains clock early, which is the second-order benefit founders tend to underweight. Absent an election, 26 CFR 1.83-4 provides that the holding period "shall begin just after such property is substantially vested" — meaning each tranche starts its own clock at vesting.

With an election, the regulation provides that the holding period "shall begin just after the date such property is transferred."

For a four-year vest, that is the difference between one holding period beginning at grant and sixteen or forty-eight of them beginning on a rolling schedule. On an exit inside the first few years, the distinction decides how much of the gain qualifies as long-term.

When does the election backfire?

When the equity is forfeited. Section 83(b)(1) closes with a sentence that founders should read twice: if the election is made and the property is subsequently forfeited, "no deduction shall be allowed in respect of such forfeiture," per the statute.

Tax paid on stock that never vests is simply gone. The election is a bet that the recipient stays long enough to vest, priced at whatever the day-one spread costs.

That bet is cheap at incorporation and expensive later. The same election filed against stock granted at a post-Series-B fair market value can generate a real cash tax liability on paper equity with no market to sell into.

What the record does not settle

Two things, and both matter to anyone filing this month.

The first is submission channel. Law firm alerts through mid-2025 describe an electronic filing option for the election, but the April 2025 revision of Form 15620 — the primary document — still instructs filers to submit the completed and signed form to the IRS by mail. This desk found no primary IRS page confirming an online channel, so the mail instruction on the form is what the record supports.

The second is valuation. Neither the statute nor the regulation tells a founder what fair market value to report; the form asks for the number and leaves the derivation to the filer. The regulation's refusal to treat a valuation mistake as grounds for revocation is the sharpest available signal about who carries that risk.

This is an explanation of a filing procedure drawn from the statute, the regulations and the IRS form. It is not tax or legal advice, and the election's arithmetic turns on facts — grant price, valuation, vesting terms — that only a taxpayer's own advisers can supply.