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IRS Extends Electronic Signatures Indefinitely

On October 30, 2023, the IRS announced that it is indefinitely extending some temporary flexibilities that were slated to expire on October 31, 2023.

During COVID-19 pandemic lockdowns, many tax professionals had concerns regarding the in-person contact needed to acquire signatures. To ease some of these concerns, while also promoting timely filing, the IRS issued a temporary policy which was slated to expire on December 31, 2021, which was later extended through October 31, 2023. This temporary policy allows taxpayers to use electronic/digital signatures for certain paper forms that are not able to be electronically filed. The IRS accepts many types of electronic signature, including:

  1. A typed name typed on a signature block
  2. A scanned or digitized image of a handwritten signature that’s attached to an electronic record
  3. A handwritten signature input onto an electronic signature pad
  4. A handwritten signature, mark or command input on a display screen with a stylus device
  5. A signature created by a third-party software

On October 30, 2023, tax professionals were able to breathe a sigh of relief as the IRS announced that this temporary policy is being extended indefinitely until more robust technical solutions are deployed. The IRS Deputy Commissioner for Services and Enforcement noted that “while these digital flexibilities were critical during the pandemic, it’s equally important to continue to offer options as the IRS moves toward a fully digital environment. We will continue to review our processes to identify areas where we can leverage technology to reduce burden on the tax community while maintaining critical security and protections against identity theft and fraud.”

The IRS has updated Internal Revenue Manual 10.10.1 to now allow the acceptance of alternatives to handwritten signatures to specific tax forms and the ability to accept images of signatures and digital signatures.

The forms where the IRS now permits electronic/digital signature that our firm typically sees are listed below:

  • Form 706, U.S. Estate (and Generation-Skipping Transfer) Tax Return;
  • Form 709, U.S. Gift (and Generation-Skipping Transfer) Tax Return;
  • Form 3115, Application for Change in Accounting Method;
  • Form 3520, Annual Return To Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts;
  • Form 3520-A, Annual Information Return of Foreign Trust With a U.S. Owner;
  • Form 8283, Noncash Charitable Contributions;
  • Form 8453 series, Form 8878 series, and Form 8879 series regarding IRS e-file Signature Authorization Forms;
  • Elections made per Internal Revenue Code Section 83(b).

A complete list of the forms where the IRS now permits electronic/digital signature is available in Internal Revenue Manual 10.10.1-2: 10.10.1 IRS Electronic Signature (e-Signature) Program | Internal Revenue Service

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