Swipe File: 83(b) Election Cover Letter & IRS Script
last updated: Feb 14, 2026
TL;DR
An 83(b) election is a formal letter or form sent to the IRS electing to be taxed on the fair market value of restricted stock at the time of grant rather than as it vests.
You just bought stock in your own startup and the clock is ticking on your tax liability. You have exactly 30 days to file this document or you risk taxing your future exit at ordinary income rates.
For a comprehensive breakdown of the mechanics, read Carta’s full 83(b) Guide. If you need the script to file immediately, use the instructions below.
- Benchmark: 1–30 days (Hard deadline from the date of stock purchase).
- Best Practice: File electronically via IRS Form 15620 for immediate proof.
- If Mailing: Send via Certified Mail with Return Receipt Requested.
- Warning: There is no relief for late filings. If you miss the window, you cannot fix it.
You just bought stock in your own startup and the clock is ticking on your tax liability. You have exactly 30 days to file this document or you risk taxing your future exit at ordinary income rates.
For a comprehensive breakdown of the mechanics, read Carta’s full 83(b) Guide. If you need the script to file immediately, use the instructions below.
Glossary
- Restricted Stock: Shares that are subject to a vesting schedule and risk of forfeiture if you leave the company before they vest.
- Fair Market Value (FMV): The current value of the stock, which is often nominal (e.g., $0.0001/share) at the very early stage.
- Section 83(b): The specific part of the Internal Revenue Code that allows you to accelerate your tax liability to the present moment.
How to file your 83(b) election
As of late 2025, you have two options: the modern electronic filing method (recommended) or the traditional paper mail method.
Option 1: Electronic filing (recommended)
The IRS now allows you to file Form 15620 electronically. This is the safest method as it provides immediate confirmation.
Option 2: Paper mail
If you prefer to mail it, copy the text below into a clean document. You need three copies: one for the IRS, one for your company records, and one for your personal tax files. Mail the IRS copy via USPS Certified Mail.
[YOUR NAME]
[YOUR ADDRESS]
[CITY, STATE, ZIP]
[SSN]
Department of the Treasury
Internal Revenue Service Center
[AUSTIN, TX or KANSAS CITY, MO - CHECK IRS.GOV FOR YOUR REGION]
Re: Election Under Section 83(b) of the Internal Revenue Code
To Whom It May Concern:
The undersigned taxpayer hereby elects, pursuant to Section 83(b) of the Internal Revenue Code of 1986, as amended, to include in gross income as compensation for services the excess (if any) of the fair market value of the shares described below over the amount paid for those shares.
1. The name, address, and taxpayer identification number of the undersigned are:
Name: [YOUR NAME]
Address: [YOUR ADDRESS]
SSN: [YOUR SOCIAL SECURITY NUMBER]
Tax Year: Calendar Year [CURRENT YEAR]
2. The property with respect to which the election is made is described as follows:
[NUMBER OF SHARES] shares of Common Stock of [COMPANY NAME], a Delaware corporation (the "Company").
3. The date on which the property was transferred is:
[DATE OF STOCK PURCHASE/GRANT]
4. The taxable year for which the election is made is
Calendar Year [CURRENT YEAR]
5. The property is subject to the following restrictions:
The shares are subject to repurchase by the Company at the original purchase price if the taxpayer's employment or service with the Company terminates. These repurchase rights lapse over time according to a vesting schedule.
6. The fair market value at the time of transfer (determined without regard to any restriction other than a restriction which by its terms will never lapse) of such property is:
$[TOTAL FMV, E.G., 10.00] (calculated as [NUMBER OF SHARES] x $[PRICE PER SHARE])
7. The amount (if any) paid for such property is:
$[TOTAL AMOUNT PAID, E.G., 10.00]
The undersigned has submitted a copy of this statement to the person for whom the services were performed in connection with the undersigned's receipt of the above-described property. The transferee of such property is the person performing the services in connection with the transfer of said property.
Sincerely,
__________________________
[YOUR NAME]
[DATE]
Spousal Consent (if applicable in community property states):
The undersigned spouse of the taxpayer joins in this election.
__________________________
[SPOUSE NAME]
Option 1: Electronic filing (recommended)
The IRS now allows you to file Form 15620 electronically. This is the safest method as it provides immediate confirmation.
- Go to the IRS Form 15620 page or mobile-friendly forms portal.
- Log in with your ID.me account.
- Complete the form with the details from your stock purchase agreement.
- Submit and save the digital receipt/timestamp as your proof of filing.
- Send a copy of the filed form to your company for its records.
Option 2: Paper mail
If you prefer to mail it, copy the text below into a clean document. You need three copies: one for the IRS, one for your company records, and one for your personal tax files. Mail the IRS copy via USPS Certified Mail.
[YOUR NAME]
[YOUR ADDRESS]
[CITY, STATE, ZIP]
[SSN]
Department of the Treasury
Internal Revenue Service Center
[AUSTIN, TX or KANSAS CITY, MO - CHECK IRS.GOV FOR YOUR REGION]
Re: Election Under Section 83(b) of the Internal Revenue Code
To Whom It May Concern:
The undersigned taxpayer hereby elects, pursuant to Section 83(b) of the Internal Revenue Code of 1986, as amended, to include in gross income as compensation for services the excess (if any) of the fair market value of the shares described below over the amount paid for those shares.
1. The name, address, and taxpayer identification number of the undersigned are:
Name: [YOUR NAME]
Address: [YOUR ADDRESS]
SSN: [YOUR SOCIAL SECURITY NUMBER]
Tax Year: Calendar Year [CURRENT YEAR]
2. The property with respect to which the election is made is described as follows:
[NUMBER OF SHARES] shares of Common Stock of [COMPANY NAME], a Delaware corporation (the "Company").
3. The date on which the property was transferred is:
[DATE OF STOCK PURCHASE/GRANT]
4. The taxable year for which the election is made is
Calendar Year [CURRENT YEAR]
5. The property is subject to the following restrictions:
The shares are subject to repurchase by the Company at the original purchase price if the taxpayer's employment or service with the Company terminates. These repurchase rights lapse over time according to a vesting schedule.
6. The fair market value at the time of transfer (determined without regard to any restriction other than a restriction which by its terms will never lapse) of such property is:
$[TOTAL FMV, E.G., 10.00] (calculated as [NUMBER OF SHARES] x $[PRICE PER SHARE])
7. The amount (if any) paid for such property is:
$[TOTAL AMOUNT PAID, E.G., 10.00]
The undersigned has submitted a copy of this statement to the person for whom the services were performed in connection with the undersigned's receipt of the above-described property. The transferee of such property is the person performing the services in connection with the transfer of said property.
Sincerely,
__________________________
[YOUR NAME]
[DATE]
Spousal Consent (if applicable in community property states):
The undersigned spouse of the taxpayer joins in this election.
__________________________
[SPOUSE NAME]
Benchmarks
The math behind the 83(b) election is simple but critical. It compares paying taxes on the nominal value today versus the potential exit value tomorrow.
Sample math
If you buy 1,000,000 shares at a par value of $0.00001, your total paid is $10.00.
Sample math
If you buy 1,000,000 shares at a par value of $0.00001, your total paid is $10.00.
- FMV: $10.00
- Amount Paid: $10.00
- Taxable Income: $0.00 (This is the goal).
- FMV: $1,000,000
- Amount Paid: $10.00
- Taxable Income: $999,990 (This is the nightmare).
83(b) election vs. standard vesting
Here is why you file this document immediately.
- With 83(b) election: You pay tax on the value today (usually $0). Future gains are taxed as Capital Gains when you sell.
- Without election (standard): You pay Ordinary Income tax on the difference between your strike price and the FMV every time shares vest. If your startup grows, this tax bill can be massive, even if you haven't sold a single share.
Risks
While filing is standard for founders, there are risks to consider:
- Forfeiture: If you leave the company and lose your unvested shares, you cannot claim a refund for the taxes you paid on them (though usually, this amount is negligible for early-stage founders).
- Overvaluation: If you file with an incorrectly high FMV, you overpay taxes now.
- The "Mailbox Rule": If you don't use Certified Mail, you have no proof of timely filing. The IRS loses mail. Do not risk it. E-filing mitigates this risk entirely.
Conclusion
Will this swipe file actually get you to $10k MRR? No. Mastering the 83(b) election is simply a necessary defense to lock in a tax advantage for a future exit. File the form immediately—preferably online—and then get back to building a product worth taxing.
FAQ
- You:Where do I mail this?Guide:If you are filing by paper, you must mail it to the IRS Service Center where you file your individual tax return. Check the IRS Instructions for the correct address based on your state.
- You:Can I file this online?Guide:Yes. As of 2025, the IRS introduced Form 15620 which allows for electronic filing. This is now the recommended method as it provides an instant digital timestamp, eliminating the risk of lost mail.
- You:What happens if I am one day late?Guide:You lose the election. There is almost zero leniency here. If you file on day 31, you will likely be taxed on the spread between your strike price and the FMV every time your shares vest in the future.
- You:What are community property states?Guide:If you live in a community property state (like California, Texas, or Washington), your spouse may also need to sign the election. Always check with a local tax professional if you are unsure.
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