What Every Tax Professional Needs to Know About E-Signatures

electronic_pad_dtimiraos.jpg

electronic pad
iStock_dtimiraos_electronic pad
Product Manager, Tax
Thomson Reuters
Columnist
Share this content
0

The concept and use of electronic signatures is nothing new. The United Nations began providing guidance to countries worldwide on how to define and enforce e-signatures as early as 1996. In 1999, the United States began codifying e-signatures and ultimately arrived at the Electronic Signatures in Global and National Commerce (E-SIGN) Act of 2000, which establishes interstate recognition that all e-signatures are every bit as legally binding as pen-and-paper signatures – well, most e-signatures.

The IRS took a dim view of e-signatures for a long time – but not in all circumstances. Interestingly enough, eight years ago, the IRS issued Revenue Procedure 2008-12 (as part of Internal Revenue Bulletin 2008-5), which defined the requirements for collecting consent forms from taxpayers under Code Section 7216. This revenue procedure contains a section dedicated to defining clear guidelines on how tax professionals can allowably obtain client consent via specific e-signature methods.

Until just a few years ago, the IRS remained an opponent of e-signatures on one particular document, Form 8879, IRS e-file Signature Authorization, which most of you will recognize as the document the IRS requires tax professionals (specifically, electronic return originators) to collect from taxpayers before transmitting their e-filed tax return to the taxing agency – and which they must maintain on file for three years.

With the rampant fraud occurring today in tax filings, it’s no surprise that the fear of new fraud risks and the slow machinations of government conspired to squash the profession’s hopes of an e-signature solution for e-file authorizations.

Please Login or Register to read the full article

To access all of the content on our site, register (it's free!) or login to your existing account.

Replies

Please login or register to join the discussion.

There are currently no replies, be the first to post a reply.