Deferring Substantial Risk of Forfeiture Under Section 83

[Carol V. Calhoun]

Has anyone thought about whether an employee can voluntarily delay the lapse of a substantial risk of forfeiture under section 83? Regulations under 409A and 457(f) deal with this issue, but I can find nothing under section 83.

Example: Jane is given restricted stock as part of her compensation. She must forfeit the stock unless she remains with the employer for at least five years. She does not make an 83(b) election.

When the end of the five-year period is nearing, she decides that she would rather take the risk of forfeiting the stock rather than paying the income tax right now. She therefore agrees with her employer that the stock will be forfeitable unless she remains with the employer for at least another two years beyond the five-year period originally provided for.

Does this work to defer the taxation? Obviously, if you did this, you'd want also to comply with the 409A rules governing second deferrals, but I'm just trying to figure out whether it's even possible under section 83.