AICPA Seeks Permanent Guidance on e-Signatures

The American Institute of CPAs (AICPA) has requested the Internal Revenue Service “address the use of electronic options to interact with the IRS and electronically file income tax returns.”

The request comes in a letter the AICPA filed with the IRS recently. It acknowledges that while e-signature relief is needed in light of the COVID-19 pandemic, AICPA believes it’s important that a permanent solution is reached that will let taxpayers and tax pros “embrace the digital and global environment and move away from manual, paper-based processing.”

While the pandemic has led the IRS to temporarily allow its employees to accept e-signatures on documents related to examination and collection of tax liabilities, AICPA believes the IRS should expand e-signature relief and make it permanent.

It all goes back to the Internal Revenue Code.

The Internal Revenue Code (IRC) requires any tax return, statement, or other document be signed in accordance with forms or regulations prescribed by the Secretary of the Treasury.

Legislation also has directed the Secretary to develop procedures for acceptance of signatures in electronic form. In addition, the Secretary may waive the requirement of a signature on an electronically filed tax return, or provide for alternative methods of signing.

“We appreciate the care taken to safely re-open the IRS offices and understand why the IRS has encouraged taxpayers to use electronic options to interact with the IRS and to e-file income tax returns. However, in the interest of the health and safety of taxpayers, tax professionals, and IRS employees, we urgently request that the IRS update its e-signature guidance and authentication requirements,” AICPA’s letter states.

What is the AICPA’s plan for e-signatures?

The Institute has requested that the IRS modify the e-signature program and identity authentication requirements in four key areas:

  • Expand use of Taxpayer Electronic Signatures
  • Rely on IRM for Identity Authentication of Taxpayers by Electronic Return Originators (EROs)
  • Expand Notice 2007-79
  • Expand Notice 2004-54

“In the interest of the health and safety of taxpayers, tax professionals, and IRS employees, we recognize the need to update the federal e-signature guidance and authentication requirements relating to standard filing procedures,” said AICPA Vice President of Taxation, Edward Karl, CPA, CGMA. “These measures will simplify the tax filing process while ensuring the safety and security of taxpayer information is maintained.”

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