Introduction: What Is IRS Form 15620?

IRS Form 15620, officially titled Section 83(b) Election, is a specialized tax election document published by the Internal Revenue Service (IRS). Governed by the Department of the Treasury, this form provides a standardized, official way for taxpayers to make an election under Section 83(b) of the Internal Revenue Code (IRC).

When startup founders, corporate executives, or early employees receive equity compensation—such as restricted stock awards—that is subject to a vesting schedule, the transfer of property triggers complex tax rules. Historically, taxpayers had to draft customized letters based on sample IRS revenue procedures to make this election.

Form 15620 modernizes and standardizes this process. By completing and submitting this official form, a service provider formally notifies the IRS that they elect to accelerate taxation on their unvested equity to the date of grant, rather than paying tax as the shares vest over time.

Purpose of the Form: Why Does Form 15620 Exist?

Under general tax rules in IRC Section 83(a), when you receive property in connection with your work, you are not taxed when the property is initially granted if it is subject to a “substantial risk of forfeiture” (such as a multi-year vesting schedule). Instead, you are taxed as each tranche vests, based on the stock’s fair market value at each vesting date, at ordinary income tax rates.

If a company grows rapidly, this default rule can be financially devastating. For example, if a founder receives stock worth pennies per share that grows to millions of dollars upon vesting, they would owe ordinary income taxes on that massive gain—even if the company is private and the shares cannot be sold to pay the tax bill.

Form 15620 solves this problem. It allows the recipient to elect to be taxed on the fair market value of the shares at the time of transfer (minus anything paid for them). By paying ordinary income tax upfront when the value is low, any future growth in the stock is treated as capital gains and is only taxed when the shares are eventually sold.

Who Needs to File Form 15620?

Form 15620 is designed for service providers who receive property that is not yet substantially vested:

Startup Founders: Entrepreneurs who incorporate a company and issue themselves founder shares subject to a reverse vesting agreement or repurchase option.
Early Startup Employees: Workers granted Restricted Stock Awards (RSAs) that vest over time (such as standard four-year vesting with a one-year cliff).
Service Providers with Early-Exercised Options: Individuals who exercise unvested Incentive Stock Options (ISOs) or Non-Qualified Stock Options (NSOs) under an approved early-exercise plan.
Partnership and LLC Members: Individuals receiving unvested profits interests or capital interests in an entity taxed as a partnership.
Independent Contractors and Advisors: Consultants compensated with restricted equity rather than cash.

Who Is Exempt or Not Required to File?

Form 15620 is completely optional, and many equity recipients cannot or should not use it:

Recipients of Fully Vested Stock: If you receive shares that are immediately 100% vested with no forfeiture restrictions, Section 83(b) does not apply because the transfer is fully taxable at grant by default.
Restricted Stock Unit (RSU) Holders: RSUs are unfunded promises to deliver shares in the future, not actual property transfers at grant. You cannot make an 83(b) election on RSUs.
Standard Stock Option Holders: If you hold stock options that you have not yet exercised, you cannot file Form 15620. The election only applies once shares are actually purchased.
Taxpayers Choosing Default Section 83(a) Rules: If you prefer to defer taxation until the shares vest, you simply do not file this form.

When to File: The Strict 30-Day Deadline

Timing is the most critical aspect of Form 15620. Under IRC Section 83(b)(2), you must file the election no later than 30 days after the date the property was transferred to you.

This 30-day statutory window is absolute and non-extendable. The IRS has no authority to grant extensions, forgive late submissions, or grant equitable relief under Treasury Regulation Section 301.9100. If you miss the 30-day deadline by even a single day, the election is invalid, and you will be forced into default Section 83(a) taxation as the shares vest.

Where and How to File Form 15620

To successfully execute a Section 83(b) election, you must deliver Form 15620 to the IRS and your employer:

Filing with the IRS: You may submit Form 15620 electronically if using an IRS-approved electronic portal. Alternatively, you can mail a signed paper copy to the IRS address as per instructions for your state of residence and filing status.
Certified Mail Recommendation: If filing by mail, always use USPS Certified Mail with Return Receipt Requested (or a designated private delivery service). The postmark date serves as the official legal filing date under IRC Section 7502.
Copy to Your Employer: Federal regulations require you to provide a copy of the completed Form 15620 to the company for which you perform services (your employer) so they can properly track payroll tax withholding.
Copy to Transferee: If the person performing the services is different from the person receiving the property, a copy must also be provided to the transferee.

Step-by-Step Instructions to Fill Out Form 15620

Form 15620 consists of nine numbered boxes and a declaration signature block. Every box must be completed accurately to prevent IRS processing questions.

Box Number	Field Description	Required Information & Action
Box 1	Taxpayer Identification	Enter your full legal name, Taxpayer Identification Number (SSN or ITIN), and current address.
Box 2	Property Description	Describe the property and quantity (e.g., “100,000 shares of Common Stock of Acme Inc.”).
Box 3	Transfer Date	Enter the exact calendar date the shares were transferred or early-exercised.
Box 4	Taxable Year	Enter the tax year that includes the transfer date reported in Box 3 (e.g., 2026).
Box 5	Restrictions & Vesting	Describe the applicable restrictions (e.g., “Vests 25% after 1 year, monthly over next 36 months; subject to company repurchase upon termination”).
Box 6	Fair Market Value (FMV)	Enter value per item (6a), quantity (6b), and total FMV (6c) determined without regard to restrictions.
Box 7	Amount Paid	Enter price paid per item (7a), quantity (7b), and total purchase price (7c). If granted for free, enter $0.00.
Box 8	Gross Income Amount	Calculate Box 6(c) minus Box 7(c). This is the taxable compensation amount included in gross income.
Box 9	Service Recipient Details	Enter the legal name, EIN, and address of the company for which you perform services.
Signature	Execution Under Perjury	Sign and date the form certifying under penalties of perjury that all information is true and complete.

Detailed Walkthrough of Calculations and Disclosures

Step 1: Determine the Date of Transfer (Box 3). This is the date you formally acquired legal ownership of the equity, typically the date you signed your stock purchase agreement or exercised your options. Your 30-day clock begins on this exact date.

Step 2: Describe Restrictions Accurately (Box 5). Outline the vesting conditions and repurchase rights. You do not need to paste the entire legal agreement; a concise summary of the vesting timeline and forfeiture terms is sufficient.

Step 3: Calculate Fair Market Value and Price Paid (Boxes 6 & 7). When calculating FMV in Box 6, federal law requires you to ignore vesting restrictions. If you are a startup founder purchasing newly issued shares at par value (such as $0.0001 per share), your purchase price in Box 7 will often match the FMV in Box 6.

Step 4: Calculate Taxable Income (Box 8). Subtract the total price paid from the total fair market value. If you paid fair market value for your shares at the time of purchase, Box 8 will be $0.00, meaning you will owe zero immediate tax on the election.

Required Documents and Information Needed Before Filling

Before filling out Form 15620, gather the following records from your company’s equity administration portal or legal team:

Restricted Stock Purchase Agreement (RSPA): The legal contract detailing the number of shares, grant date, purchase price, and vesting schedule.
Proof of Payment: A cancelled check, bank wire confirmation, or payroll deduction record proving you paid the purchase price listed in Box 7.
Fair Market Value Documentation: An independent 409A valuation report, board consent resolution, or par value determination confirming the per-share value.
Company Information: The exact legal entity name, Employer Identification Number (EIN), and corporate mailing address of your employer.

Common Mistakes to Avoid

Because Section 83(b) elections cannot be fixed retroactively, avoiding procedural errors is critical:

Missing the 30-Day Window: Counting business days instead of calendar days is a frequent mistake. The election must be postmarked or submitted within 30 calendar days of the transfer date.
Failing to Deliver a Copy to Your Employer: Many filers mail the form to the IRS but forget to give a copy to their company. Your employer must have this copy to adjust W-2 reporting.
Submitting for RSUs: Attempting to file Form 15620 for Restricted Stock Units (RSUs) is invalid because RSUs are not property transfers under Section 83.
Forgetting to Keep Proof of Mailing: If the IRS loses your paper submission, you must be able to prove timely filing using a certified mail receipt and stamped postmark.
Underestimating the Downside Risk: If you pay tax on unvested stock and later leave the company before vesting—or if the startup fails—the tax you paid is non-refundable, and you cannot claim a tax deduction for the lost shares under IRC Section 83(b)(1).

Consequences of Not Filing Form 15620

Failing to file Form 15620 does not trigger IRS penalties or fines. Instead, it forfeits your right to early tax treatment, subjecting you to default rules under Section 83(a):

Taxation at Every Vesting Date: As shares vest each month or year, you will owe ordinary income tax on the spread between the original purchase price and the current value.
Higher Tax Rates: You will pay ordinary income tax rates (up to 37%) plus Medicare and Social Security taxes on future appreciation, rather than favorable long-term capital gains rates (up to 20%).
Phantom Income on Private Stock: You may face massive tax bills on paper gains in private stock that you cannot sell on an exchange, creating a severe cash crunch.
Reset Capital Gains Holding Clock: The holding period for long-term capital gains and Qualified Small Business Stock (QSBS) begins on the vesting date rather than the original grant date.

Related Forms and Schedules

Form 15620 interacts with several IRS forms during your equity ownership lifecycle:

Form 1040: U.S. Individual Income Tax Return (where any income reported in Box 8 is included as wages).
Schedule D (Form 1040): Capital Gains and Losses (used when you eventually sell the stock).
Form 8949: Sales and Other Dispositions of Capital Assets.
Form W-2: Wage and Tax Statement (reflects any compensation recognized from the election).
Form 1099-NEC: Nonemployee Compensation (if equity is received as an independent contractor).
Form 3921: Exercise of an Incentive Stock Option Under Section 422(b).
Form 3922: Transfer of Stock Acquired Through an Employee Stock Purchase Plan.

Frequently Asked Questions (FAQs)

Do I have to use Form 15620, or can I still write a letter to the IRS?

While taxpayers historically drafted letters following Revenue Procedure 2012-29, the IRS introduced Form 15620 to standardize submissions. Using Form 15620 is strongly recommended because it guarantees that all required statutory information is included.

Can an 83(b) election be revoked after filing?

Generally, no. Under IRC Section 83(b)(2), an election is irrevocable unless you obtain written consent from the IRS Commissioner. Consent is granted only in rare cases involving a mutual mistake of fact, never because the company’s stock price declined.

Do I still need to attach a copy of Form 15620 to my annual tax return?

No. In 2016, the IRS eliminated the requirement to attach a copy of the 83(b) election to your annual Form 1040. However, you should retain a certified copy with proof of mailing in your permanent tax files.

What happens if I paid $0 for my shares?

If you paid nothing for the stock, enter $0.00 in Box 7. Your taxable income in Box 8 will be equal to the total fair market value of the shares reported in Box 6(c), which will be taxed as ordinary compensation income for the year.

How does the 30-day deadline work if the 30th day falls on a weekend?

Under IRC Section 7503, if the 30th calendar day falls on a Saturday, Sunday, or legal holiday, your filing is considered timely if it is postmarked on the next succeeding business day.

Will the IRS send me a confirmation receipt after I file Form 15620?

The IRS does not automatically issue confirmation notices for paper 83(b) elections. To establish proof of receipt, mail an extra copy of the form along with a self-addressed stamped envelope and a cover letter requesting a date-stamped copy back.

Conclusion: Key Takeaways

IRS Form 15620, Section 83(b) Election, is one of the most powerful tax planning tools available to startup founders and equity recipients. By choosing to pay tax on unvested shares upfront, you lock in low valuations, start the long-term capital gains holding clock immediately, and protect yourself against massive future tax liabilities on illiquid shares.

However, the election requires strict procedural execution. You must file Form 15620 within the non-extendable 30-day statutory window, retain proof of certified mailing, provide a copy to your employer, and understand the downside risk if the shares are forfeited. Following these guidelines ensures that your equity growth remains protected under federal tax law.

IRS Form 15620 Guide: Section 83(b) Election Instructions