Washington, D.C. (August 28, 2020) – In response to challenging remote working environments caused by the COVID-19 pandemic, the Internal Revenue Service (IRS) notified its employees in late March that they may temporarily accept scanned or digital signatures as well as allow the sharing of certain documents via email. In a related memorandum issued on June 12th, the IRS extended the guidance expiration date from July 15, 2020 through to the end of 2020. However, this relief from the “wet” signature requirements was severely limited in scope and did not include documents associated with return filings or extensions.
Following a letter submitted earlier this month by the American Institute of CPAs (AICPA) requesting that the IRS expand the scope of the June 12th memorandum to all electronic file (e-file) signature authorization forms and non-income tax returns, including paper-filed returns, the IRS issued a new memorandum today allowing for a temporary deviation from the handwritten signature requirement for a limited list of tax forms.
“We greatly appreciate the IRS’s decision to expand the scope of their e-signature requirements. By expanding the scope of relief beyond collection activities, the IRS is lessening the burden on taxpayers and tax practitioners in a significant way,” said AICPA Vice President of Taxation, Edward Karl, CPA, CGMA. “The steps taken by the Service helps the nation navigate difficult circumstances. We encourage the IRS to continue to work to make this relief permanent.”
Currently, 11 states have provided pandemic-related guidance allowing for expanded e-signature use on tax returns. These states recognize the health and technology challenges arising from COVID-19 and understand how these challenges make it difficult for practitioners and clients to obtain handwritten signatures.
In June, the AICPA submitted recommendations to the IRS to address the use of electronic options to interact with the IRS and to electronically file income tax returns.
Veronica L. Vera