The IRS has recently enacted a new process for the online filing of IRS Form 2848, Powers of Attorney. Previously, the Power of Attorney needed to be mailed or faxed into the IRS’s CAF Unit in order to be entered into the IRS’s system. However, with the allowance of electronic filing , the IRS has enacted new rules for how taxpayers may sign the POA, including when signatures on POAs may be electronic or must be “wet” signatures. https://www.irs.gov/tax-professionals/submit-forms-2848-and-8821-online
While the IRS website statement on signatures is not crystal clear, the rules set forth two options for obtaining signatures on and submitting the Power of attorney:
- “Wet” ink signatures are needed in order to fax or mail the Form 2848 to the IRS. It appears that “wet” ink means an original ink signature. However, a representative of the IRS has confirmed that that if the taxpayer signs the Form 2848 POA and scans and emails tax counsel the scanned signature, that will constitute a “wet ink” signature.[1]
- Electronic signatures may be uploaded to the IRS’s website provided the electronic signature has been authenticated.
What is an electronic signature? The IRS defines an electronic signature as:
An electronic signature is a way to get approval on electronic documents. It can be in many forms and created by many technologies. Acceptable electronic signature methods include:
- A typed name that is typed on a signature block
- A scanned or digitized image of a handwritten signature that is attached to an electronic record
- A handwritten signature input onto an electronic signature pad
- A handwritten signature, mark, or command input on a display screen with a stylus device
- A signature created by a third-party software
When must the electronic signature be authenticated? Tax counsel must authenticate the electronic signature when counsel “do[es] not have a personal or business relationship” with the person signing. Seemingly, tax counsel has a business relationship with the taxpayer based upon the legal representation. That said, it is probably safer to just authenticate for new clients. The process for authentication is described in the website listed above and will not be discussed in this article.
Practice Point: My usual method for obtaining a taxpayer signature on the Form 2848 is to email the taxpayer the form and have the taxpayer sign and return to me by email or fax. I then fax the form to the IRS CAF unit and to the Practitioner Priority Service if needed. This process appears to still be permitted as a “wet signature”, and I have used it several times recently without objection by the IRS since the IRS’s new guidance on wet and electronic signatures has been issued.
About the Author: Jared M. Le Fevre is a tax attorney and partner in the Tax, Trusts and Estates Practice Group of Crowley Fleck PLLP. Mr. Le Fevre represents taxpayers before the IRS, IRS Independent Office of Appeals, Tax Court, Federal District Court and state tax agencies throughout Montana, Wyoming, North Dakota, Idaho, and Utah. Mr. Le Fevre is involved in federal and state and local tax audits, appeals, and tax resolution throughout these western states. Mr. Le Fevre also advises clients on the tax effects of business and real estate transactions.
Jared acknowledges with gratitude the assistance of associate attorney Lucas Forcella with this article.
[1] IRS Stakeholder Liaison Cathye Mason, March 5, 2021.