When working with the Internal Revenue Service (IRS), it is important to ensure that your paperwork is in order. One way to do this is by using an electronic signature. An electronic or digital signature, also known as an e-signature, is a legally binding way to sign documents electronically. While electronic signature laws vary by state, the IRS does allow e-signatures on paperwork, including tax returns.
Here we break down key considerations about IRS electronic signatures.
Does IRS accept Electronic Signatures?
Electronic signatures are similar to traditional signatures. Instead of signing with a physical pen and paper, you can use your computer, smartphone, or tablet to sign a document online. You only need a digital document copy and an electronic signing software or service.
Some of the IRS forms that can be signed electronically include, among many others:
- Form 706, U.S. Estate (and Generation-Skipping Transfer) Tax Return
- Form 1128, Application to Adopt, Change or Retain a Tax Year
- Form 4421, Declaration – Executor’s Commissions and Attorney’s Fees
- Form 730, Monthly Tax Return for Wagers
- Income Tax Return
There are many benefits to using an e-signature for IRS forms. For one, it’s more convenient than mailing a paper copy of the form. In addition, your e-signature cannot be forged like a traditional signature can, making it more secure. Using an e-signature also makes your process faster since you don’t have to wait for the form to be processed by the IRS. Overall, using an electronic or digital signature for IRS forms is a convenient, secure, and fast way to sign a document.
Types of e-Signatures Accepted By the IRS
The IRS has been increasingly accepting a wider variety of electronic or digital signatures in recent years due to the advantages it brings. Electronic signatures are essential for increasing efficiency and improving operations within the agency. By allowing a wider range of signatures, the IRS can reduce the time and resources spent processing paper documents.
The IRS accepts a few key e-Signatures.
Typed Electronic Signature
In the business world, a typed e-signature is becoming increasingly common. This is simply a signature typed into a software program rather than written by hand. The advantages of using a typed signature include being much faster and more convenient than writing out a signature each time.
To create a typed e-signature, several e-signature software like Signaturely can help. The platform lets you quickly create an e-signature by customizing your typed signature.
Drawn Electronic Signature
A drawn e-signature is a digital version of a handwritten signature used to sign documents electronically. Creating this signature is simple: type your signature into a software program or use a stylus or fingerprint reader to scan and create a digital version of your wet signature.
Once you have created your signature, add it to any document you need to sign electronically. Drawn electronic or digital signatures are just as legally binding as traditional handwritten signatures. They are easy to sign documents without printing them out and signing them physically.
Scanned Wet Signature
A scanned wet signature is created by a scanned or digitized image of a handwritten signature that has been captured using a scanner or other input device. This type of signature can be added to an electronic document just like any other digital signature. While not as secure as a digital signature, a scanned wet signature can still be used to validate the signer’s identity and confirm that they agree to the terms of the document.
In addition, scanned wet signatures can be used when digital signatures are not accepted, such as in certain legal contracts. As a result, they provide a convenient way to add a physical signature to an electronic document.
More Electronic Signatures Accepted by the IRS
Overall, the IRS will accept various electronic or digital signatures. These include:
- A typed name on a signature
- A digitized signature attached to an electronic record
- A handwritten signature captured by an electronic signature pad or stylus device
- A signature created by any third-party software
- Images of signatures in common formats like .jpg, .tiff, or .pdf.
FAQs About Electronic Signatures for IRS
There are various frequently asked questions about how the IRS treats digital signatures. These include:
The IRS does accept e-signatures on certain forms and documents, such as your income tax return. You must create an account with the IRS e-Services portal to use a digital signature. Once you have registered for an account, you can log in and access various online services, including the ability to sign certain forms electronically.
The IRS has been expanding the types of tax returns that can be filed electronically in recent years. While most people still file their taxes electronically, some prefer to sign their income tax returns by hand. The IRS has stated that it is possible to electronically sign an income tax return if the taxpayer has a valid Personal Identification Number (PIN).
An IRS e-file signature authorization is a special code that allows you to sign and submit your income tax return electronically. The IRS generates this code, and it is unique to each taxpayer. When you enter this signature authorization, it verifies your identity and allows your tax return to be processed.
What You Need to Remember About IRS Electronic Signatures
By accepting digital signatures, the IRS has made it easier for taxpayers to file their tax forms. You need to know a few things about e-signatures to make the process go as smoothly as possible. We’ve outlined the types of e-signatures accepted by the IRS and how to use them so that you can file your income tax return quickly and easily. That way, you’re better equipped for the upcoming tax season.
