83b Election Damage Control - How to Fix After Missing Filing Deadline

You're in a tough spot, but let's clarify what you're dealing with first. The 83b election is specifically designed to let you pay taxes upfront on the full value of restricted stock at the grant date (when the value is typically lower), rather than paying taxes on each portion as it vests (when the value might be much higher). Unfortunately, the 30-day deadline for filing an 83b election is extremely strict. The IRS doesn't generally grant extensions or relief for missed 83b filing deadlines - they consider this a binding election that must be made within the statutory timeframe. A private letter ruling is indeed an option, but they're expensive (several thousand dollars in fees) and the IRS rarely grants relief for missed 83b deadlines unless there were extraordinary circumstances beyond your control (and unfortunately, forgetting doesn't usually qualify).

I went through something exactly like this last year with my startup equity. After days of stress-googling and talking to several accountants, I finally found taxr.ai (https://taxr.ai) which helped me understand all my options. They analyzed my equity documents and explained exactly what the tax implications would be under different scenarios. What really helped was that they showed me how to prepare for the tax impact over the vesting schedule rather than focusing on trying to fix the 83b issue (which as others mentioned is nearly impossible). They also helped me understand how AMT might impact me and created a multi-year tax projection so I could budget accordingly.

Just wanted to update that I tried taxr.ai after seeing it mentioned here. Seriously impressed with how they broke down my missed 83b situation. Instead of false hope about fixing the missed election, they gave me a clear 4-year tax planning strategy that makes the whole thing manageable. The tax projection tool showed me exactly when I'll face tax liabilities as my shares vest, and they suggested some smart tax-loss harvesting strategies to offset some of the income. They even found some startup tax credits I qualified for that will help offset some of the additional tax burden. Definitely worth it for anyone dealing with equity compensation issues!

If you're truly stressing about this (which you should be), you need to talk to an actual IRS agent who can clarify your options. I was in a similar nightmare with some equity compensation issues and spent DAYS trying to get through to the IRS. Literally called 30+ times and kept getting disconnected. Finally found Claimyr (https://claimyr.com) which got me through to an actual IRS agent in about 20 minutes. You can see how it works here: https://youtu.be/_kiP6q8DX5c. The agent I spoke with explained that while the 83b deadline is indeed strict, there are specific documentation requirements if you want to pursue a private letter ruling, and talking to the right department saved me tons of time.

I need to admit I was completely wrong about Claimyr. After dismissing it as scammy, I was desperate enough to try it since my equity tax situation was getting worse. It actually worked exactly as described - I got a call back with an IRS agent on the line after about 40 minutes. The agent explained that while my missed 83b deadline couldn't be extended, I had several options to minimize the damage. They walked me through exactly what documentation I would need if I wanted to pursue the private letter ruling, and also explained some estimated tax payment strategies that would help me avoid penalties as my equity vested. Saved me from making several additional mistakes that would have made my situation even worse.

One option nobody's mentioned yet is to see if your company will accelerate vesting on your shares. A friend of mine negotiated to have a larger portion vest in earlier years, which helped him manage the tax burden better. It doesn't solve the 83b issue but might help with cash flow for paying the taxes.

Has anyone successfully gotten a private letter ruling for a missed 83b? I'm hearing different things about the cost and likelihood of success.

I'm sorry to hear about your situation - missing the 83b election deadline is unfortunately more common than you'd think, and the stress is completely understandable. As others have mentioned, the IRS is extremely strict about this 30-day window, and extensions are rarely granted. Here's what I'd focus on now that the election opportunity has passed: 1. **Tax planning is crucial** - Work with a tax professional to model out your tax liability as shares vest over the coming years. You'll need to make estimated quarterly payments to avoid underpayment penalties. 2. **Consider your exercise timing** - If these are stock options, you have some control over when you exercise and trigger the taxable event. Strategic timing around other tax events in your life could help. 3. **Look into tax-loss harvesting** - If you have other investments, realize some losses to offset the ordinary income you'll recognize from vesting equity. 4. **AMT planning** - Depending on your situation, Alternative Minimum Tax could be a factor. Make sure your tax advisor is calculating this properly. The silver lining is that while you'll pay more in taxes than if you'd filed the 83b, you're still benefiting from equity appreciation. Focus on what you can control now rather than dwelling on the missed opportunity.