Articles

Articles

eSignOnline and the IRS: Electronic Signature Guidance for Forms 8878 and 8879

As of March 11, 2014, the IRS has expanded its acceptance of electronic signatures on Forms 8878 and 8879. This new policy update from the IRS will allow tax professionals to further streamline their business processes to quickly and efficiently sign time sensitive forms.

According to the IRS requirements, no specific technology is required. However, the electronic signature must include:

  • A handwritten signature input onto an electronic signature pad;
  • A handwritten signature, mark or command input on a display screen by means of a stylus
    device;
  • A digitized image of a handwritten signature that is attached to an electronic record;
  • A typed name (e.g., typed at the end of an electronic record or typed into a signature block
    on a website form by a signer);
  • A shared secret (e.g., a secret code, password or PIN) used by a person to sign the
    electronic record;
  • A digital signature; or
  • A mark captured as a scalable graphic.

eSignOnline offers various methods for placing your electronic signature on the document. You can handwrite your signature via a stylus or finger on touch screen devices or select a predefined electronic signature. eSignOnline offers unique session passwords and per signer passwords, as well as other advanced authentication methods such as knowledge based authentication (KBA) and SMS text, to prevent anyone from signing on your client’s behalf.

In addition to these signature requirements, the IRS has created a set of data requirements when electronically signing Forms 8878 and 8879. eSignOnline offers a complete approach that meets or exceeds both the ESIGN Act and each of the IRS’ guidelines summarized below.

Item 1: Digital image of the signed form

All eSignOnline documents are secure and encrypted so documents can be read and signed only by the designated users. When you open the signed documents from eSignOnline, you will see a blue bar in your PDF reader program indicating that the document has been “signed and all signatures are valid” with a signature panel for more details. This indicates that the document has not been tampered with since it left the eSignOnline platform.

Item 2: Date and time of the signature

For each signing inside eSignOnline, there is an accompanying Certificate of Authenticity with date and time stamps of every event in the document signing process.

Item 3: IP address (remote transaction only)

For each signing inside eSignOnline, there is an accompanying Certificate of Authenticity with an audit trail that tracks IP addresses.

Item 4: Identity Verification

When using eSignOnline, as you add signers to a new signing session, you can select one of the authentication methods. The most secure and advanced method is called “Knowledge Based Authentication” and is the one we highly recommend to use. This is a premium service with a fee, as we work in conjunction with third party credit agencies who display the personal questions to the signer.

 

To read the full list of the IRS requirements, please visit http://www.irs.gov/uac/Electronic-Signature-Guidance-for-Forms-8878-and-8879.

Leave a Reply