Introducing Managed 83(b) Elections

We’re excited to announce a new add-on — managed 83(b) elections!

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What is an 83(b) election? </br>Many startup founders and employees make 83(b) elections with the IRS to minimize and simplify taxes on shares they receive. Our handbook article on 83(b) elections is a great resource if you’re interested in learning more.
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With our managed 83(b) election add-on, you can file an 83(b) election without touching a single piece of paper, going to the post office, or filling out USPS forms.  We’ll handle all of that for you.

More importantly, our process is designed to minimize the chance of problems in legal due diligence for financings and acquisitions.  This goes well beyond the basic steps for making an 83(b) election.

Specifically, we’ve designed our process to optimize for evidence showing you made the 83(b) election:

• We don’t just mail the 83(b) election with Certified Mail service, we’ll use Priority Mail class and make sure the Certified Mail receipt is physically postmarked by the USPS.  
• We’ll request a physical return receipt from the IRS.  If we don't receive it, we'll submit a PS Form 3811-A to get delivery information for the return receipt from the USPS.
• We'll ask the IRS to send a date-stamped copy of your 83(b) election back and include a self-addressed Priority Mail envelope with Certified Mail tracking.

Once evidence of the election comes back, we’ll scan and upload it to your account.  If you want, we’ll store the physical evidence in secure file storage so you don’t need to worry about where to put it.  And if you ever need the physical evidence, we’ll mail it to you via your choice of Registered Mail (the most secure service the USPS offers) or Priority Mail (faster than Registered Mail).

This all goes beyond the bare minimum necessary to file a valid 83(b) election.  But making a valid 83(b) election is different from being able to prove it.  And being able to prove you made a valid 83(b) election to a court is different from being able to quickly convince people in legal due diligence that you did.  Given how much could be at stake, we think it makes sense to take these extra steps to minimize the chance of a problem.

Starting today, if you’re a startup founder, you’ll be able to leverage all the thinking and expertise we've put into 83(b) elections.  Our managed 83(b) election add-on will be available when you form a new startup or add a new co-founder through Clerky.  Your employees can use it too, when you issue them restricted stock using our equity compensation products.  And if you're a startup attorney, you can rest a little easier knowing your clients on Clerky can file their 83(b) elections the way you would.

Enjoy!