My question is about a 83(b) election form during early exercise of ISO.
I've worked in a company for quite some time and was awarded ISO in 2017: 50k shares at a strike price of $0.02c. A year later I early exercised all of it when the Fair Market Value was $0.13c. I did some research and realized that I should file a 83(b) election to the IRS within the 30 days, which I did. I received it back stamped a while after. The year passed and I went on with my life.
Here comes tax season, so I'm calculating AMT for the year 2019. That's when I realize that I didn't fully understand how a 83(b) election worked (for many reasons, one being that I probably read too much about it when it was actually quite simple), and I've put the wrong number of shares on the form (2/3 of the total), when I really exercised all of them.
When calculating AMT with both numbers (all shares or 2/3), I'm not subject to more taxes so I'm not concerned about it. However, my company is now going through an acquisition, and I will have the opportunity to sell my shares. I know the FMV at time of closing the deal will be greater than the one when early exercising.
What can/should I do in order to be straight with the IRS? I certainly don't want to have to pay higher income taxes on the 1/3 of the shares value that I forgot to include in the 83(b) form, because of such a misunderstanding typo. The 30 days window is also over so I can't send another one.
Also, if the IRS look for it, they will realize that the ISO gross income amount entered for my 2019 taxes is different that on the 83(b). What is the possible impact of this (even though it doesn't impact the AMT)?
I must also say that at the time of the acquisition, I will have less than the 2/3 shares vested (amount entered on the 83(b) form), but it will happen a year after the early exercise date (starting the clock for long term capital gain for tax purposes).