On April 15, 2021, the IRS issued a memorandum (the April 2021 Memo) that temporarily allows electronic or digital signatures for numerous tax forms that generally require handwritten signatures, including elections under Section 83(b) of the Internal Revenue Code (Code) (26 U.S.C. § 83(b)) (Section 83(b) Elections).

The April 2021 Memo revises an existing IRS memorandum issued on December 28, 2020 (the December 2020 Memo), which temporarily allowed electronic or digital signatures for certain forms due to concerns relating to in-person contact during the COVID-19 pandemic, but did not extend this relief to Section 83(b) Elections.

In March 2021 a coalition of 48 organizations, including many law firms, submitted a joint letter to the IRS requesting that it:

While the April 2021 Memo temporarily allows electronic or digital signatures for Section 83(b) Elections, it does not discuss electronic filing or other permanent reforms. Taxpayers are still therefore required to mail physical Section 83(b) Elections to the IRS.

Under the April 2021 Memo, forms that use digital or electronic signatures must be signed and postmarked on or after August 28, 2020. The temporary relief expires on December 31, 2021. The IRS indicates that it may periodically update the list of forms that may temporarily use digital or electronic signatures, to either add or remove applicable forms.

Practical Law will watch for additional developments regarding the Section 83(b) Election electronic signature and filing process.

For more on Code Section 83, see Practice Note, Section 83: Property Transferred in Connection with the Performance of Services. For model Section 83(b) Elections, see Standard Documents, Code Section 83(b) Election: Restricted Stock and Code Section 83(b) Election: Profits Interests.