Reference: Propesed Reg Sec 1.83-2

The IRS has removed the requirement that a copy of a taxpayer’s Section 83(b) election be attached to his/her individual tax return.  This was to remove a barrier to those taxpayers e-filing their individual returns.  All other requirements of Section 83(b) remain in place.  Taxpayers may rely on these proposed regs for property transferred on or after January 1, 2015.

The Section 83(b) election is often done when an individual receives stock options from an employer which are subject to a substantial risk of forfeiture over a period of time. Example: The options can’t be exercised until the business reaches $100 million gross sales and are forfeited if the employee leaves the business.