IRS written determination 201438006

Private letter rulings and published taxpayer determination letters. Native document type is retained separately; a determination letter is not labeled a private letter ruling. These taxpayer-specific releases cannot be used or cited as precedent under 26 USC 6110(k)(3); applicability and current legal force are not independently certified. Keep repeated UILC subjects attached to one actual numbered document.

Internal Revenue Service
Department of the Treasury
Washington, DC 20224
Number: 201438006
Release Date: 9/19/2014
Index Number: 83.02-00
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Third Party Communication: None
Date of Communication: Not Applicable
Person To Contact:
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Telephone Number:
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Refer Reply To:
CC:TEGE:EB:EC
PLR-117937-14
Date:
June 18, 2014
LEGEND:
Year 1=------
Date 1=--------------------
X=-------------
Company X=-----------------------------
Date 2=----------------
Dear ------------:
This is in response to a request for a private letter ruling, dated May 13, 2013,
submitted on your behalf by your authorized representative, requesting a ruling under
section 83(b) of the Internal Revenue Code (Code). Specifically, you request an
extension of time to file with your Year 1 tax return a copy of an election made pursuant
to section 83(b) of the Code. The facts, as represented, are as follows.
On Date 1, you received X shares of common stock in Company X, for whom you
provided services. On that same date, you executed an election pursuant to section
83(b) of the Internal Revenue Code. The election met the content requirements of
section 1.83-2(e) of the Income Tax Regulations (Regulations). This election was filed
by Company X with the Internal Revenue Service, who received it on Date 2, within 30
days of the date of transfer. When your tax return was prepared for Year 1, your return
preparer failed to attach a copy of your election. As a result, a copy of your election
was not submitted with your Year 1 tax return, as required by section 1.83-2(c) of the
regulations.
Section 83 of the Code provides rules for the taxation of property transferred to
an individual in connection with the performance of services. Section 83(a) of the Code
provides that if, in connection with the performance of services, property is transferred
to any person other than the person for whom such services are performed, the fair
market value of the property (less the amount paid for the property) shall be included in
the gross income of the recipient in the first taxable year in which the recipient's interest
in the property is not subject to a substantial risk of forfeiture.

PLR-117937-14
2
Section 83(b)(1) of the Code provides that any person who performs services in
connection with which property is transferred may elect to include in gross income for
the taxable year of the transfer the excess of the fair market value of the property over
the amount paid for it. Section 83(b)(2) of the Code provides that an election made
pursuant to section 83(b)(1) shall be made in the manner prescribed by the Secretary
and shall be made not later than 30 days after the date of the transfer.
Section 1.83-2(c) of the Regulations provides that a section 83(b) election is
made by filing one copy of a written statement with the Internal Revenue office with
whom the taxpayer files his return. In addition, one copy of such statement shall be
submitted with the income tax return for the year of transfer.
Section 1.83-2(d) of the Regulations provides that the person who performed the
services shall also submit a copy of the statement to the person for whom the services
are performed.
Section 1.83-2(e) of the Regulations provides that the statement shall be signed
by the person making the election and shall indicate that it is being made under section
83(b) of the Code, and shall contain the following information: the name, address and
taxpayer identification number of the taxpayer; a description of each property with
respect to which the election is being made; the date or dates on which the property is
transferred and the taxable year for which such election was made; the nature of the
restriction or restrictions to which the property is subject; the fair market value at the
time of transfer of each property with respect to which the election is being made; the
amount (if any) paid for such property; and, with respect to elections made after July 21,
1978, a statement to the effect that copies have been furnished to other persons as
provided in section 1.83-2(d) of the Regulations.
Based on the representations made and after consideration of the provisions of
sections 83(b) of the Code and 1.83-2 of the Regulations we have determined that you
fulfilled the requirements for a valid election under section 83(b) when your statement
was mailed to the Internal Revenue office on Date 2. Failure to submit a copy of the
statement with your Year 1 tax return did not affect the validity of the election. We
therefore conclude that, to the extent that your receipt of Company X stock on Date 1
constituted a transfer of property under section 83 of the Code, your election under
section 83(b) with respect to that stock remains in effect.
We ask that you now forward a copy of the statement to the Internal Revenue
office with which you file your tax returns to be associated with your Year 1 tax return.
Except as expressly provided herein, no opinion is expressed or implied as to the
federal tax consequences of the facts described above under any other provision of the
Code.

PLR-117937-14
3
This ruling is directed only to the taxpayer requesting it. Section 6110(k)(3) of
the Code provides that it may not be used or cited as precedent.
A copy of this letter must be attached to any income tax return to which it is
relevant.
This ruling is based on the information and representations submitted by your
authorized representative and accompanied by a penalty of perjury statement executed
by you. While this office has not verified any of the material submitted in support of the
request for rulings, it is subject to verification on examination.
In accordance with the Power of Attorney on file with this office, a copy of this
letter is being sent to your authorized representative.
Sincerely yours,
________________________
THOMAS D. SCHOLZ
Senior Counsel
Executive Compensation Branch
Office of Division Counsel/Associate
Chief Counsel (Tax Exempt and
Government Entities)
cc: