IRS Releases Final Regulations On Section 83(b) Elections

The IRS released final regulations (T.D. 9779) eliminating the requirement for an individual to attach a Section 83(b) election to his or her individual income tax return for the year the election is made. Section 83(b) allows a service provider to elect to include the fair market value of property transferred in connection with the performance of services, less the amount paid for the property (if any), in income on the date the property is transferred (for example, the grant date) even though the property is subject to a substantial risk of forfeiture.

To make a valid Section 83(b) election, the service provider is required to file an election statement with the IRS within 30 days after the date the property is transferred to him or her and provide a copy of the election to the employer that transferred the property. Under the prior regulations, the service provider was also required to attach a copy of the election to his or her federal income tax return for the