SECTION 3. SCOPE

This revenue procedure applies to taxpayers who wish to revoke a valid election under § 83(b).

July 3, 2006 32 2006–27 I.R.B.

The estimated annual reporting and/or recordkeeping burden is 400 hours.

The estimated annual burden per respondent/recordkeeper varies from 1 to 4 hours.

The estimated number of respondents is 200. The estimated annual frequency of response is on occasion.

Books or records relating to a collection of information must be retained as long as their contents may become material in the administration of any internal revenue law. Generally, tax return and tax return information are confidential, as required by § 6103.

DRAFTING INFORMATION

The principal author of this revenue procedure is Jean Casey of the Office of Associate Chief Counsel (Tax Exempt & Government Entities). For further information regarding this revenue procedure, contact Jean Casey at (202) 622–6030 (not a toll-free call).

could be made, consent to revoke the § 83(b) election will be granted, regardless of the reason for which it is filed.

Example 3 . On August 31, 2006, B begins employment with Company O under an employment contract that provides that B will receive Company O Class A common stock. On September 1, 2006, Company O transfers 50X shares of substantially nonvested Company O Class B common stock to B in accordance with the employment contract. B pays $100X for the shares, which have an aggregate fair market value of $100X on that date. On September 15, 2006, B makes a valid election under § 83(b) with respect to the stock transfer. On September 29, 2006, B discovers that Company O has two classes of common stock and that Company O transferred Class B common stock to B instead of Class A common stock. On November 1, 2006, B files a request for a ruling from the Internal Revenue Service to revoke the election. B’s request for consent to revoke the § 83(b) election is timely, and it is based on a mistake of fact as to the underlying transaction because B did not receive the property B expected to receive in the transfer. Based on these facts, and absent any other facts to the contrary, consent to revoke the § 83(b) election will be granted because the stock B received was transferred under a mistake of fact as to the underlying transaction.

Example 4 . The facts are the same as in Exam- ple 3, except that B files the request for the ruling on December 15, 2006. Because the request for revocation was not requested within 60 days of the date B discovered the mistake of fact as to the underlying transaction, B’s request will not be granted.