The IRS Is Temporarily Expanding the Use of Electronic Signatures

The COVID-19 pandemic has forced many changes on how transactions are carried out. In an effort to curb the spread of the Novel Coronavirus and protect the health of taxpayers and tax professionals, the IRS has made the move to temporarily allow electronic or digital signatures on certain forms that cannot be filed electronically.

The IRS will accept images of signatures and electronic signatures on certain documents related to the determination or collection of tax liability through tiff, jpg, jpeg, pdf, Microsoft Office suite, or Zip files.

This acceptance of electronic signatures is effective for forms mailed to the IRS on or after August 28th through December 31st, 2020. The forms covered are as follows:

• Form 3115, Application for Change in Accounting Method
• Form 8832, Entity Classification Election
• Form 8802, Application for U.S. Residency Certification
• Form 1066, U.S. Income Tax Return for Real Estate Mortgage Investment Conduit
• Form 1120-RIC, U.S. Income Tax Return for Regulated Investment Companies;
• Form 1120-C, U.S. Income Tax Return for Cooperative Associations
• Form 1120-REIT, U.S. Income Tax Return for Real Estate Investment Trusts;
• Form 1120-L, U.S. Life Insurance Company Income Tax Return
• Form 1120-PC, U.S. Property and Casualty Insurance Company Income Tax Return
• Form 8453 series, Form 8878 series, and Form 8879 series regarding IRS e-file Signature Authorization Forms

Forms 8453-EO and 8879-EO used by charities and other nonprofits to e-file their IRS Form 990, IRS Form 990-EZ and IRS Form 990-PF are included in this provision. 

Taxpayers and tax professionals would most likely have preferred all forms to be included, however, in an effort to maximize remote capabilities during the COVID-19 pandemic, and limit elements of risk and fraud that the acceptance of digital/electronic signatures bring, the list of forms included is limited.

Although this deviation is temporary, we hope that when the COVID-19 pandemic is behind us, the IRS might evaluate the benefits versus risks involved and consider making some of these changes permanent.

At the state level, currently only 11 states permit electronic images, either scanned or photographed. These states include: Arizona, California, Massachusetts, Maryland, Michigan, Mississippi, Nebraska, New Jersey, New York, Ohio and Pennsylvania. Among these states, only Maryland, Mississippi, California and New York permit emailing of documents.