IRS Expands Use of Digital Signatures in Wake of Pandemic, Now Accepts Even a Photo of a Signature

Chris Gaetano
Published Date:
Apr 1, 2020

The IRS, understanding that many people are unable to travel due to the global pandemic, has expanded what it counts as a valid signature, according to Accounting Today. The IRS already accepts e-signatures on tax documents from both paid preparers and taxpayers. Now, the IRS will, temporarily, also accept images of signatures, either scanned or photographed, and digital signatures on documents related to the determination or collection of tax liability. Beyond this, the agency will also allow its employees to accept documents through email, or through secure messaging services like SecureZip.

These new standards, so far, only apply to extensions of statutes of limitations on assessment or collection, waivers of statutory notices of deficiency and consents to assessment, agreements to specific tax matters or tax liabilities (closing agreements), along with any other statement or form that needs the signature of a taxpayer or representative and is traditionally collected by IRS personnel outside of standard filing procedures (such as a case-specific power of attorney), according to Accounting Today.

Currently, paid tax preparers are unable to use an e-signature on behalf of their clients when filing New York state tax returns. The NYSSCPA is advocating for legislation (see page 6) to allow them to do so. The global COVID-19 pandemic has not stopped these efforts but, rather, accelerated them. NYSSCPA Executive Director and CEO Joanne S. Barry and President Ita M. Rahilly, on March 24, sent a letter to Gov. Cuomo on this very issue.

"Earlier this week, in order to slow the current pandemic, New York State was put on PAUSE,"  they said in the letter. "Non-essential businesses are closed, gatherings of any size for any reason are cancelled, and all New Yorkers are directed to practice social distancing –by staying home and keeping six feet of space from others when in public. We believe the expanded use of electronic signatures on e-file authorizations forms this tax season could provide an immediate and additional safeguard to mitigate the spread of the novel coronavirus (COVID-19)."

The Trusted Professional will report any new developments in this area.

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