Executive summary: Expanded digital capabilities
The IRS has confirmed that the signature guidance released in a response to the COVID pandemic has been moved into the Internal Revenue Manual where it is now standard operating procedure. The IRS has also expanded on-line accounts to include businesses operating as sole proprietors and added features to the Tax Pro account to enable practitioners to better manage power of attorney authorizations.
IRS updates e-signature policy and releases online accounts for sole proprietors
IRS e-signature policy
The IRS has updated the Internal Revenue Manual (IRM 10.10.1) to expand and make permanent authorizations for the use of digital signatures. Prior authorization applied only to forms signed and postmarked between Aug. 28, 2020 and Dec. 31, 2023. The IRM provides that a compliant e-signature satisfies requirements for legally binding electronic signatures outlined in IRM 10.10.1.3.1 and provides acceptable forms of e-signature.
IRS has designated that the following 41 forms can be electronically signed:
- Form 11-C, Occupational Tax and Registration Return for Wagering.
- Form 637, Application for Registration (For Certain Excise Tax Activities).
- Form 706, U.S. Estate Tax Return.
- Form 706-A, United States Additional Estate Tax Return.
- Form 706-GS (D), Generation-Skipping Transfer Tax Return for Distributions.
- Form 706-GS (D-1), Notification of Distribution from a Generation-Skipping Trust.
- Form 706-GS (T), Generation-Skipping Transfer Tax Return for Terminations.
- Form 706-QDT, U.S. Estate Tax Return for Qualified Domestic Trusts.
- Form 706 SCHEDULE R-1, Generation-Skipping Transfer Tax.
- Form 706-NA, U.S. Estate (and Generation-Skipping Transfer) Tax Return.
- Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return.
- Form 730, Monthly Tax Return for Wagers.
- Form 1042, Annual Withholding Tax Return for U.S. Source Income of Foreign Persons.
- Form 1066, U.S. Real Estate Mortgage Investment Conduit (REMIC) Income Tax Return.
- Form 1120-C, U.S. Income Tax Return for Cooperative Associations.
- Form 1120-FSC, U.S. Income Tax Return of a Foreign Sales Corporation.
- Form 1120-H, U.S. Income Tax Return for Homeowners Associations.
- Form 1120-IC DISC, Interest Charge Domestic International Sales – Corporation Return.
- Form 1120-L, U.S. Life Insurance Company Income Tax Return.
- Form 1120-ND, Return for Nuclear Decommissioning Funds and Certain Related Persons.
- Form 1120-PC, U.S. Property and Casualty Insurance Company Income Tax Return.
- Form 1120-REIT, U.S. Income Tax Return for Real Estate Investment Trusts.
- Form 1120-RIC, U.S. Income Tax Return for Regulated Investment Companies.
- Form 1120-SF, U.S. Income Tax Return for Settlement Funds (Under Section 468B).
- Form 1127, Application for Extension of Time for Payment of Tax Due to Undue Hardship.
- Form 1128, Application to Adopt, Change or Retain a Tax Year.
- Form 2678, Employer/Payer Appointment of Agent.
- 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 Return of Foreign Trust with a U.S. Owner.
- Form 4421, Declaration – Executor’s Commissions and Attorney’s Fees.
- Form 4768, Application for Extension of Time to File a Return and/or Pay U.S. Estate (and Generation-Skipping Transfer) Taxes.
- Form 8038, Information Return for Tax-Exempt Private Activity Bond Issues.
- Form 8038-G, Information Return for Government Purpose Tax-Exempt Bond Issues.
- Form 8038-GC; Information Return for Small Tax-Exempt Governmental Bond Issues, Leases and Installment Sales.
- Form 8283, Noncash Charitable Contributions.
- Form 8453 series, Form 8878 series and Form 8879 series regarding IRS e-file Signature Authorization Forms.
- Form 8802, Application for United States Residency Certification.
- Form 8832, Entity Classification Election.
- Form 8971, Information Regarding Beneficiaries Acquiring Property from a Decedent.
- Form 8973, Certified Professional Employer Organization/Customer Reporting Agreement.
- Elections made pursuant to Internal Revenue Code Section 83(b).
IRS online accounts
The IRS Business Tax account for sole proprietors went live this month. The new business tax account is for sole proprietors who file their business tax returns with an employer identification number. This initial version of the business tax account offers limited functionality. It allows taxpayers to view company information, grant employees access to the account and request a tax compliance check for the business.
IRS tax pro accounts
IRS also recently released enhanced functionality of the Tax Pro Account and added capabilities to the Individual Online Tax Account.
Tax pro accounts have been enhanced to link to a practitioner’s Centralized Authorization File (CAF) number. This now allows a practitioner to review all third-party authorizations attached to their CAF number and to withdraw authorizations no longer needed. The IRS plans to continue enhancing capabilities for all its online services in the coming months as part of the agency’s modernization efforts.
Taxpayers and practitioners with any questions or concerns about using an e-signature or IRS online accounts should contact one of the authors listed below.
