IRS Accepting Limited Digital Signatures

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On Friday, the IRS announced that it will temporarily accept digital signatures on a handful of forms that cannot be filed electronically. The change is temporary and will be in effect for forms postmarked between August 28, 2020 and December 31, 2020.

The purpose of the temporary change is to allows tax professionals and taxpayers the ability to work together remotely and minimize in person contact during a global pandemic.

What the announcement did not clarify, is whether those digital signatures must be KBA (Knowledge-Based Authentication) Compliant. However, the memorandum did note that “Electronic and digital signatures appear in many forms when printed and may be created by many different technologies. No specific technology is required for this purpose during this temporary deviation.”

The forms eligible for digital signatures 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
  • Form 8879 Series

While only temporary, this is certainly a step in the right direction. If there is one thing the COVID-19 pandemic has taught us, it is that it’s imperative for the IRS and the accounting and tax profession to embrace technology and the remote working environment as soon as possible. Our livelihoods and those of our clients kind of depend on it.

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