Both the paper income tax return submitted to the IRS, as well as electronic income tax returns, must be signed by the taxpayer and the paid preparer. There are two permissible methods for electronically signing individual income tax returns.
The Declaration of Taxpayer must be signed and dated by the taxpayer to authorize the origination of the electronic submission of the return to the IRS before the return is transmitted to the IRS. The taxpayer’s declaration under penalties of perjury that the return is true, correct, and complete and the taxpayers’ Consent to Disclosure is included in the Declaration of Taxpayer. The Consent to Disclosure authorizes the IRS to disclose information to the taxpayers’ Authorized IRS e-file Providers. Taxpayers authorized Intermediate Service Providers, Transmitters, and EROs to receive from the IRS an acknowledgment of receipt or reason for rejection of the electronic return, the reason for any delay in processing the return or refund and the date of the refund.
After the taxpayers sign the declaration and the return is checked, certain electronic return data amounts may change. If this happens, taxpayers must sign a new declaration if any of the following differing amounts occur:
More than $50 to “Total Income” or “AGI,” or
More than $14 to “Total tax,” “Federal income tax withheld,” or “Amount you owe.”
Electronic Signatures for Taxpayers
Taxpayers can use two methods of signing individual income tax returns with an electronic signature (Method of signing a return electronically through use of a Personal Identification Number (PIN). These are the Self Select PIN and the Practitioner PIN. Either method will allow taxpayers to use a Personal Identification Number (PIN) to sign the return and the Declaration of Taxpayer.
Both methods require the IRS to be able to verify that the electronic signature submitted was selected or authorized by the taxpayer. The following are the verification methods:
Self-Select PIN method: Taxpayers must provide their prior-year Adjusted Gross Income (AGI) for authentication by the IRS. No signature documents are required.
Practitioner PIN method: Form 8879, a signed authorization form, must be completed.
Whichever method of electronic signature is used, taxpayers may enter their PIN in the electronic return. EROs can select (or the software may generate) the taxpayer’s PIN, providing the taxpayer agrees by signing an IRS e-file signature authorization, Form 8879, containing the PIN.
When taxpayers sign using the Self-Select method and enter their PIN directly in the electronic return, signature documents are not required. In all other instances, taxpayers must sign signature authorization forms. The Practitioner PIN method also requires the use of the signature authorization forms.
The following taxpayers are ineligible to sign individual income tax returns with the Self-Select PIN method:
Primary taxpayers under age sixteen who have never filed;
Secondary taxpayers under age sixteen who did not file the prior tax year; and
Taxpayers who filed Forms 1040-NR the prior year.
Everyone is eligible to use the Practitioner PIN method. However, some taxpayers may also need to file Form 8453, as indicated previously.
In some instances, taxpayers may wish to sign electronically but are unable to enter their PIN directly in the electronic return. Taxpayers can authorize the ERO to enter their PINs in the electronic return record by completing the appropriate IRS e-file signature authorization form. Form 8879, IRS e-file Signature Authorization, authorizes an ERO to enter PINs on Individual Income Tax Returns and Form 8878, IRS e-file Authorization for Application of Extension of Time to File, authorizes an ERO to enter their PINs on Forms 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return, and 2350, Application for Extension of Time to File U.S Income Tax Return.
The taxpayers’ PIN may be entered in the electronic return record before the taxpayer signs Form 8879 or 8878, but the appropriate form must be signed and dated by the taxpayer before the ERO originates the electronic submission of the return. In most instances, the taxpayer must sign and date the Form 8879 or Form 8878 after reviewing the return and verifying that the tax return information on the form matches the information on the return.
Taxpayers who provide a completed tax return to an ERO for electronic filing may complete the IRS e-file Signature Authorization without reviewing the return originated by the ERO. The line items from the paper return must be entered on the applicable Form 8879 or Form 8878 before the taxpayers sign and date the form. EROs may use these pre-signed authorizations as authority to input the taxpayer’s PIN, only if the information on the electronic version of the tax return matches the entries from the paper return.
The ERO representative and taxpayers must always complete and sign Forms 8879 or 8878 for the Practitioner PIN method of electronic signature. Taxpayers may use the Practitioner PIN Method to electronically sign Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return if a signature is required. A signature is only required for Form 4868 when an electronic funds withdrawal (A payment method which allows the taxpayer to authorize the U.S. Treasury to electronically withdrawal funds from their checking or savings account) is also being requested.
The ERO must retain Forms 8879 and 8878 for three years from the return due date or the date that the IRS received the return, whichever is later. EROs must not send Forms 8879 and 8878 to the IRS unless the IRS requests they do so.