Dear IRS: Let's Make the Filing of 83(b) Elections Easier
(This was a longer post but I have abbreviated it to simplify it.)
Right now there is no guidance from the IRS which expressly countenances electronic signatures on 83(b) elections.
This is unfortunate. I would recommend the new administration issue guidance right away which countenances electronic signatures on 83(b) elections to remove any uncertainty about this. This would make life easier for founders, who are already given too short of a period of time to make their 83(b) elections.
If Congress really wanted to get serious about fixing Section 83(b), they could "reverse" the presumption. Meaning, if no tax was due on the issuance of the shares, because the founder paid FMV for the shares--no election would be required to be filed--even if there was vesting on the shares.
It doesn't make sense, if you pay FMV for the shares, that you should have to file an 83(b) election simply because you have vesting on your shares. But, alas, that is the law as it currently stands.
In summary, here are three ideas for Congress and/or the administration to fix 83(b) elections:
- Allow electronic signatures
- Extend the 30 days to something a lot more reasonable, like 180 days.
- Reverse the presumption.
