The 83(b) election for founders outside the US

What it is

Founder shares in a startup usually vest: the company can buy back unvested shares if a founder leaves. Without an election, US tax law treats each slice of shares as received when it vests, and taxes the difference between what you paid and what it is then worth. If the company has grown, that can be a large bill on shares you cannot sell.

An 83(b) election tells the IRS to treat all your shares as received on day one, when they are worth almost nothing. Any growth after that is taxed only when you sell.

Thirty days, no exceptions

The election must reach the IRS within 30 days of the share purchase. There is no extension and no fix for a missed deadline. That is why, for a Titan C Corp, it is prepared and filed as part of formation rather than left to the founder.

Does it matter if I am not a US taxpayer?

Often it changes nothing for a founder who never becomes a US taxpayer. But plans change: founders move to the US, take US jobs, or become tax resident through time spent there. Filing costs nothing and closes off a problem that can only be fixed in the first month, so the standard advice is to file.

A founder without an SSN or ITIN can still file. The form is completed without one and noted accordingly.

Keep your copy

Keep the filed election and the proof it was sent with your formation documents. Investors' lawyers ask for it in due diligence, and a missing 83(b) is one of the problems that can slow a funding round.