Key Takeaways
- Digital Filing Reduces Risk and Increases Confidence: Electronic 83(b) submissions give instant IRS confirmation and audit trails, reducing risk of lost or delayed filings.
- Critical Deadlines and Complexities Still Apply: The 30-day deadline remains firm, and issues like share caps or rounding rules may still require expert review.
- Strategic Advantage in Executive and Equity Planning: Streamlined filing supports executive retention and growth incentives, but success depends on careful planning.
Starting in July 2025, the IRS is making life a little easier for employees and companies dealing with equity compensation. You’ll now be able to submit Section 83(b) elections electronically through the IRS portal—a big shift from the old, paper-only process that often caused unnecessary stress and last-minute scrambling. This update brings long-needed convenience to a critical step in planning and compliance.
What’s Changed
- Electronic Filing Available: Taxpayers can now use the IRS’s portal to submit Form 15620 (introduced in 2024) online, with instant confirmation of receipt.
- Audit Trail: Filers receive a time-stamped record—providing peace of mind and stronger documentation in case of IRS scrutiny.
- Deadlines Remain the Same: The 30-day filing deadline from the grant/purchase date has not changed. Missing this deadline renders the election invalid.
Practical Benefits
- Faster processing and confirmation vs. certified mail.
- Reduced risk of lost forms or delayed delivery.
- Easier for companies to track employee compliance.
Nuances & Limitations
- Quantity cap: Online submissions are capped at 999,999 securities. Very large grants (e.g., founder shares) may require paper filing.
- Decimal rounding: The system only accepts two decimal places. Awards with pricing fractions (e.g., $0.0001/share) may be distorted, so consider a paper filing to preserve accuracy.
- Employer obligations: Even with e-filing, taxpayers must still provide a copy of the election to their employer/issuer.
Who’s Most Affected
- Founders and early-stage companies issuing low-priced stock.
- Private equity-backed and venture-backed companies where equity plays a key role in compensation.
- Executives receiving restricted stock grants with significant appreciation potential.
- Industries heavy in equity incentives (technology, life sciences, SaaS, and high-growth startups).
Action Steps for Clients
- Plan ahead: Ensure employees understand the 30-day filing deadline.
- Set up IRS portal access early: ID.me registration is required before filing.
- Confirm submission: Save the IRS confirmation and share with the company for records.
- Review large/complex grants: Work with your advisor if share quantities or pricing structures don’t fit the online system.
Simpler Process, Same Complexity: Why Expert Guidance Still Matters
This change reduces friction in a historically risky process, but nuanced limitations mean businesses can’t assume “one-click simplicity.” Equity-compensation decisions remain highly complex, particularly for middle-market businesses navigating private equity, startup growth, or executive retention strategies.
LBMC’s tax experts are available to help you assess when to use the new e-filing option and ensure elections are valid, accurate, and well-documented.
For more information or assistance with 83(b) elections, contact your LBMC tax advisor.
Content provided by Ben Carver, LBMC Shareholder and Tax Leader. Contact him at ben.carver@lbmc.com.
LBMC tax tips are provided as an informational and educational service for clients and friends of the firm. The communication is high-level and should not be considered as legal or tax advice to take any specific action. Individuals should consult with their personal tax or legal advisors before making any tax or legal-related decisions. In addition, the information and data presented are based on sources believed to be reliable, but we do not guarantee their accuracy or completeness. The information is current as of the date indicated and is subject to change without notice.