When a Tax Professional files an electronic Return on behalf of a Taxpayer, the Tax Professional obtains Forms 8878 and 8879 as declaration documents required by the IRS on behalf of a Taxpayer. Forms 8878 and 8879 are declaration documents and signature authorizations for an e-filed return filed by an Electronic Return Originator (ERO). These forms serve as a Taxpayer testament that the return is true, correct and complete. The Taxpayer must complete them before the return is e-filed. These forms are completed by the Taxpayer when:
- The Tax Professional PIN method is used.
- The taxpayer authorizes the ERO to enter or generate the Taxpayer’s personal identification number (PIN) on his or her e-filed individual income tax return.
On March 27, 2020, IRS released a temporary deviation
IRS implemented a “temporary deviation” that allows IRS employees to accept images of signatures (scanned or photographed) and digital signatures on documents related to the determination or collection of tax liability. In addition, the temporary deviation permits IRS employees to accept documents via email and to transmit documents to Taxpayers using Secure Zip or other established secured messaging systems. The categories of documents (including Forms 8878 or 8879) included in the temporary deviation are:
- extensions of statute 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)
- any other statement or form needing the signature of a taxpayer or representative traditionally collected by IRS personnel outside of standard filing procedures
Who can use the e-filing option?
The e-signature option is only available to taxpayers e-filing their tax returns through an ERO, who uses software that provides identity verification and e-signature. The ERO must be able to record the Taxpayer’s name, social security number, address and date of birth electronically for identity verification purposes.
E-signature methods available are:
The software the ERO chooses to use dictates the e-signature method used to sign the form. The electronic record must be tampering proof once it is e-signed. Here are examples of methods used to capture an e-signature:
- A handwritten signature captured on an e-signature pad
- A handwritten signature, mark, or command input on a display screen using a stylus device
- A digitized image of a handwritten signature that is attached to an electronic record
- A typed name
- A shared secret such as a PIN, password, or secret code, used to sign the electronic record
- A digital signature
- A mark captured as a graphic
- Images of signatures (scanned or photographed) in one of the following file types: tiff, jpg, jpeg, pdf, Microsoft Office suite, or Zip.
- Digital Signatures that use encryption techniques to provide proof of original and unmodified document
The ERO has e-signature responsibilities
- If the taxpayer uses the e-signature option, the ERO must use software that includes identity verification. The software must record the following data:
- Digital image of the signed form
- Date and time of the signature
- Taxpayer’s computer IP address (remote transaction only)
- Taxpayer’s login identification — username (remote transaction only)
- Results of the identity verification check validating that the taxpayer’s ID verification was successful; and
- The e-signature method used to sign the record
- ERO is also responsible for maintaining a tamper-proof record in a secure, access-controlled storage system for 3 years from the due date of the return or 3 years from the IRS return receipt date, whichever is later
- ERO’s must be able to retrieve and reproduce legible hard-copies of the signed form
IRS wants to protect Employees, Taxpayers and their Representatives while still delivering critical functions in a remote working environment
IRS has directed employees to work remotely during the Covid-19 crisis. IRS wants its mission critical functions to continue. These temporary deviation changes are meant to facilitate operations for the IRS, Taxpayers and their Representatives during the Covid-19 crisis.
Taxpayers continue to have their filing obligations and ought to choose their Tax professionally wisely.