Does the IRS accept electronic signatures?
Electronic signatures are a quick, safe, and easy way to complete a form without the need for in-person contact.
This is particularly useful when sending forms to the IRS (Internal Revenue Service).
Whether you’re filing a tax return at the end of the tax year, want to know how to sign a PDF W-9 form online, or are setting up a generation-skipping trust, secure electronic forms make everything easier and more secure.
Read on for:
- What’s acceptable to the IRS
- IRS electronic signature requirements
- The IRS and scanned signatures
- Which IRS forms can be signed electronically.
IRS electronic signature guidance: What is acceptable?
Thanks to the U.S Electronic Signatures in Global and National Commerce Act (E-Sign Act), the IRS acknowledges that secure digital signatures are legally binding.
So, the IRS will accept eSignatures in place of handwritten signatures on most forms.
However, the IRS can’t accept eSignatures for everything.
Where does the IRS draw the line? Well, it depends on whether or not the form can be filed electronically.
Most forms, including income tax returns, can be filed electronically.
In some cases, there are forms that can be signed electronically, but they require IRS e-file Signature Authorization Forms (Form 8879) to be submitted alongside them.
However, the IRS does still require some forms in hard copy.
In particular, there are certain forms that normally can be filed electronically without attachments, but if they need particular attachments they must be sent as a hard copy.
For example, if you need to attach a US residency certification to your estate tax return, you will need to put a physical copy in the mail.
Or, if you are asking for the reduced tax due to undue hardship, you may need to send in physical evidence to support your request.
The IRS is moving towards a fully online service. However, it’s still a work in progress.
All in all, it’s a bit complicated! Don’t worry, though, we’ll break down the IRS electronic signature requirements below.
What are the IRS electronic signature requirements?
For an eSignature to be validated you need to be able to prove that the signee is who they say they are.
Most commonly, the IRS will ask for two-factor authentication.
You must get consent from the signee before things can proceed.
Usually, this is done with a one-page consent form, which is sent to the signee after authentication.
3. Electronic signature
The IRS defines an electronic signature as “an electronic symbol logically associated with a record and executed or adopted by a person with the intent to sign the record”.
Examples of these include:
- A typed name in a signature block
- A signature drawn with a stylus on an electronic signature pad
- A scanned image of a wet signature
- A mark or command made on a touchscreen
- A secure, verified signature created by a third-party software provider like PandaDoc.
4. Tamper proof seal
Tax forms have to be completely secure and tamper proof to be valid.
The IRS’ own system will usually apply encryption that makes it tamper proof.
With any good digital form software, the entire electronic signing process should come with an audit log.
This should be included with the electronic form, for non-repudiation purposes.
6. Document retention
A copy of any documentation (including associated forms 4506-C, 4506-T, or 4506T-EZ) needs to be kept for two years.
7. Quality review
Just as with a wet signature, an electronic signature needs to be verified by an independent party.
This should be done in the form of an audit, which should be sent to the IVES HQ analysts annually.
If you want to save attorney’s fees, an independent accountant can audit your electronic record.
Does the IRS accept scanned signatures?
The IRS does accept scanned, photographed, or otherwise digitized images of signatures.
For the IRS to accept these images, they have to be in a file format supported by Microsoft 365.
That being said, scanned signatures are less secure than electronic signatures.
So, the IRS may sometimes ask for a secondary form of ID to verify that you really are the signee.
What IRS forms can be signed electronically?
There are many forms that the IRS can file electronically, from Form 730 (Monthly Tax Return for Wagers) to Form 1120-C (U.S. Income Tax Return for Cooperative Associations).
For the full list of forms, visit irs.gov.
A couple of the most common forms are detailed below:
Does the IRS accept electronic signatures on form 1040?
Form 1040, the US Individual Income Tax Return has been digitized for some time now.
Taxpayers can sign it digitally through a self-selected PIN or a tax preparer-selected PIN.
For a 1040 form template, check out PandaDoc’s extensive template catalog.
Does the IRS accept electronic signatures on form 2848?
Forms 2848 and 8821 deal with disclosure.
They enable the IRS to disclose information to parties listed on the relevant form.
These forms have been digitized and can be completed with eSignatures since early 2021.
Does the IRS accept electronic signatures on form 2553?
This is the Election by a Small Business Corporation form.
It makes a corporation eligible for an entity classification election.
The form can be filled in, signed, and sent electronically.
Does the IRS accept electronic signatures on form 8879?
Form 8879 is a signature authorization document (so, yes).
It also authorizes an ERO (Electronic Return Originator) to enter taxpayer PINs on tax returns.
Create IRS-compliant electronic signatures
With PandaDoc, you can create secure, IRS-compliant electronic signatures for everything and everyone including:
- Qualified domestic trusts
- Documents for a decedent
- Installment sales
- Application for change in accounting method
- U.S. life insurance company income tax return
- Regulated investment companies
- Tax professional.
If you’re an owner of a US business or corporation or an individual with personal tax needs, PandaDoc can help you to fill in and file IRS-compliant electronic documents.
Try it today!