When the Internal Revenue Service announced this summer, it was temporarily expanding the use of e-signatures on IRS forms, a number of professional tax groups applauded. One of those is the American Institute of CPAs (AICPA). Now the group is recommending the temporary measures be expanded and made permanent.
The original notice alerted IRS employees they could temporarily accept scanned or digital signatures as well as allow the sharing of certain documents by email in order to cope with the constraints mandated by the COVID-19 pandemic.
In June, the IRS extended the guidance expiration date from the original July 15 date to the end of 2020. Despite the extra time frame, however, the original relief from so-called “wet” signature requirements was very limited in its scope and did not include documents associated with return filings or extensions.
The AICPA wants the IRS relief to become permanent.
The CPA group has submitted a formal letter of request to the IRS that asks the agency to expand the scope of its original memo to allow all electronic file signature authorization forms—including on non-income tax returns and paper-filed returns. In response, the IRS has issued a new memo allowing for a temporary deviation from the handwritten signature requirement for a limited number of tax forms.
The next step, AICPA members say, is to make the expanded e-signatures permanent.
“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.”
At present, some 11 states have provided pandemic-related guidance allowing e-signature use on tax returns. The AICPA says 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.”