More Forms Get Digital Signature OK from IRS

The Internal Revenue Service has followed through on its promise to add digital signature capability to more tax forms, enabling an additional six forms to use the feature.

On Aug. 28, the agency announced it would temporarily allow the use of digital signatures on certain forms that can’t be e-filed. Now, more forms have been added to that list.

The change in e-signature policy is driven by the pandemic.

The decision was made in order to protect the health of taxpayers and tax professionals alike during the COVID-19 pandemic. The change helps to ensure that in-person contact and the resulting risks to taxpayers and preparers can be reduced, while allowing both to work remotely and file forms in a timely manner.

These forms have been added to the list of those being accepted digitally:

  • Form 706, U.S. Estate (and Generation-Skipping Transfer) Tax Return;
  • Form 706-NA, U.S. Estate (and Generation-Skipping Transfer) Tax Return;
  • Form 709, U.S. Gift (and Generation-Skipping Transfer) Tax Return;
  • Form 1120-ND, Return for Nuclear Decommissioning Funds and Certain Related Persons;
  • Form 3520, Annual Return To Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts; and
  • Form 3520-A, Annual Information Return of Foreign Trust With a U.S. Owner.

These forms are available on the IRS website and through tax professional software. These forms cannot be e-filed. Generally, they are printed and mailed.

Which tax forms did the IRS initially allow e-signatures for on August 28, 2020?

The new forms join the original list that was announced Aug.28. All these forms can be submitted with digital signatures if they are mailed by or on Dec. 31, 2020:

  • Form 3115, Application for Change in Accounting Method;
  • Form 8832, Entity Classification Election;
  • Form 8802, Application for U.S. Residency Certification;
  • Form 1066, U.S. Income Tax Return for Real Estate Mortgage Investment Conduit;
  • Form 1120-RIC, U.S. Income Tax Return For Regulated Investment Companies;
  • Form 1120-C, U.S. Income Tax Return for Cooperative Associations;
  • Form 1120-REIT, U.S. Income Tax Return for Real Estate Investment Trusts;
  • Form 1120-L, U.S. Life Insurance Company Income Tax Return;
  • Form 1120-PC, U.S. Property and Casualty Insurance Company Income Tax Return; and
  • Form 8453 series, Form 8878 series, and Form 8879 series regarding IRS e-file Signature Authorization Forms.

The IRS continues to monitor the temporary option for e-signatures and will determine if further steps are needed.

An IRS release says the agency understands the importance of digital signatures to the tax community.

“The agency will continue to review its processes to determine where long-term actions can help reduce burden for the tax community, while at the same appropriately balancing that with critical security and protection against identity theft and fraud,” the IRS writes.

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