I'm not sure what I'm missing here, but is it possible, if acceptable to the employer, for an employee to surrender restricted stock to the employer in satisfaction of the withholdings tax in relation to an 83(b) election with regard to the restricted stock? It doesn't seem right, but I don't find a prohibition of it.

example: ER awards EE 100 shares of restricted stock. EE wants to make an 83(b) election. To do so, he must pay x, which has the same value as 30 shares of stock. So he offers to surrender 30 of the 100 shares. What's wrong with this idea?

Well, by surrendering the 30 shares, I suppose you mean to the ER. When do you get to pay tax to an ER rather than the IRS? You wouldn't think you'd have any tax basis would you from paying the ER rather than the IRS?

Maybe if the IRS paid in cash the value of the 30 shares to the IRS and it was reported as a tax payment made by the EE you could do this.

well, you're not paying tax to the ER...but they are responsible for the withholding and remittance to the IRS...the exact scenario would occur at vesting if no 83(b) election were made and the ER allows it to be 'cashless'...otherwise, the ER would withhold from your regular pay...I don't understand your last sentence...

It can work, but I have to question why the employer would be willing to redeem shares for cash (which is essentially what is happening here) in which the employee may never become vested? I am assuming that the stock has some significant value; if, as is usually the case when making a 83b election, the value is very low if not nominal and as a result the employee thinks the election is a very good gamble, why wouldn't the employee want to come up with the cash to pay the tax and keep all the shares?