The Internal Revenue Service is extending until June 30, 2021, the period in which it will accept digitally signed and emailed documents due to the COVID-19 pandemic.
In August, the IRS expanded the use of e-signatures as a way to make it easier to file various tax forms and other documents through the end of this year (see story). The IRS also opened a secure messaging service that would allow some documents to be emailed to IRS employees during the pandemic as a way of getting around the millions of pieces of paper mail that accumulated at IRS facilities while they were closed earlier this year. In a memo early this month, Sunita Lough, deputy commissioner of services and enforcement at the IRS, extended the date until the middle of next year.
Deb Smallwood, Senior Partner at Strategy Meets Action, a ReSource Pro Company, is widely recognized as an industry thought leader who is known for her “big strategic thinking with pragmatic approaches to transformation.” Deb challenges the status quo of insurance and influences the industry to reimage the business of insurance for the digital connected world.
Deb’s passion is to advise carriers and MGA’s to create transformation strategies and plans by bringing clarity to the possibilities of change and innovation. For over 30 years, Deb has helped hundreds of clients transform their businesses driving high business value and success. Deb’s deep expertise is commercial lines underwriting transformation and how best to leverage customer experience, digital enablement and transformational technologies and data.
Prior to launching Strategy Meets Action, Deb held a variety of leadership roles including VP of the insurance practice at Tower Group, Chief Transformation Officer (CIO) at Insurance Company of the West (ICW), Partner at KPMG LLP, and Head of Commercial Lines Application Development & Maintenance at Liberty Mutual.
Deb is often asked to contribute to major insurance publications and is also a frequent keynote speaker at leading industry conferences.
Edward Webb currently serves as BPM’s advisory partner, offering over 35 years of experience in consulting and financial management, including specific experience in transaction advisory services for both healthy and stressed companies. A published author and speaker, he currently leads the Corporate Finance Consulting Group at BPM and sits on the firm's Management Committee. He holds a doctorate in business administration with an emphasis in ownership transition from Temple University, as well as an MBA with a focus on finance from Indiana University. He was born and raised in suburban Philadelphia before moving his family to California. He may be reached at ewebb@bpmcpa.com.
John Beal is Senior Vice President, Analytics, Insurance, for LexisNexis Risk Solutions. He is responsible for leading the company’s insurance analytics and modeling products and services. With more than 20 years of experience in data and analytics across the insurance and financial services industries and market-leading innovations, Beal and his team develop incremental predictive uses of existing data and processes with a strong focus on developing personal and commercial lines credit-based loss models as well as new non-credit industry solutions. Prior to LexisNexis, Beal held key leadership roles at First Union National Bank in Charlotte, where he was Vice President, Credit and Market Analytics within the Quantitative Analysis Group, and at Citicorp Bankcard, where he served as Assistant Vice President, Credit Policy Department.
The memorandum extends through June 30, 2021, IRS employees’ ability to accept images of signatures (either scanned or photographed) as well as digital signatures on documents related to the determination or collection of tax liability. The memo also extends until June 30 the date when documents can be sent by email and documents can be transmitted to taxpayers by IRS employees using some secure messaging systems.
“As part of our response to the Coronavirus COVID-19 situation, we are taking steps to protect
employees while still delivering on our mission-critical functions,” Lough wrote. “We are maximizing the ability to execute on critical duties in a remote working environment where employees, taxpayers and their representatives are working from alternate locations.”
The IRS will accept images of signatures in tiff, jpg, jpeg or pdf format, as well as Microsoft Office and Zip compressed files. The IRS will also accept digital signatures that employ encryption techniques such as DocuSign.
To eliminate mailing documents as much as possible, Lough also recommended IRS employees should use e-fax or secure messaging systems to receive and transmit documents. However, it’s up to the taxpayer’s if they want to transmit documents electronically. If taxpayers aren’t able to e-fax a document or provide it through an established secure messaging service, they can use email with attachments to transmit a document to the IRS if employees take the following steps:
1. Use the IRS’s existing policies for taxpayer contacts to authenticate the identity of the taxpayer or representative by phone to ensure they are authorized to send and receive taxpayer information. In addition, IRS employees need to verbally verify the email address.
2. Advise the taxpayer or representative by phone that communications through unencrypted email via the internet aren’t secure. Employees have to explain that, except for minimal identifying information in the body of the email, such as the name and last four digits of a Taxpayer Identification Number, they should keep sensitive information out of the subject line and body of emails as much as possible, and should use password-protected encrypted attachments via SecureZip or some other encryption method.
3. The taxpayer or representative should include a statement, either in the form of an attached cover letter or within the body of the email, saying, “The attached [name of document] includes [name of taxpayer]’s valid signature and the taxpayer intends to transmit the attached document to the IRS.” If a taxpayer fails to include such a statement, IRS employees will ask for it in a follow-up phone call. Retransmitting attachments isn’t required, however.
4. After IRS employees receive the document via email, they will make a notation in the case files and include the document as well as the email or cover letter in the case file.
5. If a taxpayer transmits a document that requires a manager’s signature at the IRS, such as an executed Form 872, IRS employees will forward the document via encrypted email to their manager for a signature.
