Just over a year ago, we blogged on IRS Proposes Regulations to Ease the Filing of 83(b) Elections. Last month, the IRS finalized the proposed rules without change. The new final regulations eliminate the requirement that a taxpayer/employee submit a copy of a section 83(b) election with his/her income tax return for the year in which the property was transferred (for example, a restricted stock award). An employee/taxpayer must maintain records sufficient to demonstrate a timely 83(b) election, but need not file a copy of the election with the IRS.
This change will be particularly helpful to an individual who electronically files (e-files) his or her annual income tax return and non-US residents making an 83(b) election. The change is effective for property transfers made on or after January 1, 2016.