---
title: Understanding the New IRS Form 15620 for Section 83(b) Elections
description: The IRS has released a new form, Form 15620, intended to make Section 83(b) elections more streamlined. If you’re planning on filing an 83(b) election to potentially lower the tax burden associated with particular stock options or other property, this new form is now available to standardize the filing process.
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# Understanding the New IRS Form 15620 for Section 83(b) Elections
By Sweeney Conrad, PS | Dec 12, 2024
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INSIGHTS/BLOG
The IRS has released a new form, [Form 15620](https://www.irs.gov/pub/irs-pdf/f15620.pdf), intended to make Section 83(b) elections more streamlined. If you’re planning on filing an 83(b) election to potentially lower the tax burden associated with particular stock options or other property, this new form is now available to standardize the filing process.
## What is a Section 83(b) election?
Taxpayers receiving restricted property, such as stock, membership interests, or other equities, in connection with services performed generally must pay income taxes based on the property’s value when it vests. However, the taxpayer may elect under Section 83(b) to include the property’s fair market value in his or her gross income, net of any amounts paid for the property at the time of transfer, rather than when it vests.
Generally, this election is made if the value of the property is expected to substantially increase before it vests. Assuming the property’s value does appreciate between the granting and vesting dates, opting for an 83(b) election can help you avoid a potentially heftier tax bill.
For example, consider the stock options included in an employee’s compensation package at a startup company. If that employee did not make a Section 83(b) election, they’d have to pay income tax based on the fair market value of the stock at the time of vesting (or when it is no longer subject to a substantial risk of forfeiture). Assuming the stock appreciated the way the employee hoped it would, they’d have a high tax burden due to the difference in vested value compared to the value at issuance. However, if that employee opted for a Section 83(b) election (and if the issuing company allowed it), the employee would instead pay long-term capital gains taxes on the appreciation and would recognize the gain upon the sale of the stock versus when it vested.
## What is Form 15620?
Before Form 15620 was created, Section 83(b) elections had to be made in writing, relying on sample language provided by the IRS (included in [Rev. Proc. 2012-29](https://www.irs.gov/pub/irs-drop/rp-12-29.pdf)) to ensure it included all the correct information. This written statement needed to be mailed to both the IRS and the company that issued the tax property, all done within 30 days of the date of purchase or exercise of the property in question.
The single-page Form 15620 was introduced to streamline filing for this process. It offers a uniform format and follows the existing regulations for Section 83(b) election procedures.
## What does Form 15620 ask for?
Key requirements on Form 15620 include:
- Your name, Tax Identification Number (TIN), and address
- A description of the property
- Date of property transfer
- Fair market value of the property at time of transfer
- Amount paid for the property (if any) and any restrictions the property is subject to
- The information of the service recipient. This is the employer or person for whom the filer is providing services in relation to the property being transferred (for example, the startup company whose stock options are part of a compensation package).
For the time being, Form 15620 is only available as a printable PDF that must be mailed to the IRS office where your income tax return is filed. An online form for e-filing will be available in the future. All other Section 83(b) requirements (such as the 30-day deadline and the requirement to provide a copy to the service recipient) still apply.
## Who is Form 15620 for?
Form 15620 is for taxpayers who were transferred substantially nonvested property for performing services that want to make the Section 83(b) election. Taxpayers are not required to use this form and you and your tax professional can continue to rely on the existing guidance provided by the IRS. However, Form 15620 is intended to make filing Section 83(b) elections clearer and more accessible.
If you’re in a position to consider making a Section 83(b) election, it’s important to note that this choice carries some risk. As with any stock, your property could lose value or even become worthless if your employment with the granting company ends before vesting. An 83(b) election also can’t be revoked after the 30-day period. Be sure to discuss the pros and cons of 83(b) elections with your tax professional before making any decisions.
As always, Sweeney Conrad is happy to help with this process. If you have questions about Section 83(b) elections or the new Form 15620, please [reach out](https://url.avanan.click/v2/___https:/www.sweeneyconrad.com/get-in-touch/contact-us/___.YXAzOnN3ZWVuZXljb25yYWQ6YTpvOjc4MWM2ODEyODJiODJhNGNmZGE0ZmMzODlhYTc1Nzg1OjY6YWU4ZDo4ZThkNjA1NWExNDQ1ZDcxMzE4OTI2MmJlYTFhNDhjOTMxOTM0ZDllNzRmMjc5MDA5YzRhOGE3MzlhYTM3ODRlOnA6RjpO).
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