Print This Page

Subject:   Michael, stock option question
Date:   Fri, 12 Mar 2004
From:   Michael

Hi Michael,

In 2001, I paid $140,000 to the IRS for income relating to a Section 83(b) election. I later learned the fair market value was in error. The company was fraudulent and had a fair market value of zero on the date of the election.

Might I be able to get a refund of the $140,000 tax paid in error? How do I get it?

Sincerely,
Michael

Answer

Date:   Mon, 03 May 2004

Hello Michael,

You need to file an amended return. The federal form is Form 1040X. You will need to be able to prove that the value that you originally reported was in error, and what the value should have been. The amended return is due within three years after the due date for the year at issue. If you filed your income tax return for 2001 by April 15, 2002, the due date would be April 15, 2005.

Good luck!

Mike Gray

For more information about incentive stock options, request our free report, Incentive Stock Options - Executive Tax and Financial Planning Strategies.

IRS Circular 230 Disclosure: As required by U.S. Treasury Regulations, you are hereby advised that any written tax advice contained in this answer was not written or intended to be used (and cannot be used) by any taxpayer for the purpose of avoiding penalties that may be imposed under the U.S. Internal Revenue Code.