One of the biggest hassles that firms have to deal with is getting signed authorizations from clients to file/extend their tax returns. This usually entails multiple staff being involved in communicating with the client and dealing with a myriad of delivery methods to and from the client. Source documents can include physical forms, faxed forms, encrypted email with PDF attachments, portals, and snail mail, which more often than not need to be scanned into a digital format and saved in the firm’s document management system. While the IRS has allowed taxpayers to electronically sign their tax return with a self-selected PIN or physically sign Form 8879 to allow the firm (ERO-Electronic Return Originator) to enter their pin, IRS Publication 1345 has been updated (as of March 11, 2014) to allow the use of electronic signature pads in the firm’s office. “Lean” administrative principals point to capturing data at the point of creation in a format that can be safely and securely saved so that it is documented and accessibly by anyone that needs access and is authorized. By utilizing digital signature capture tools integrated with digital workflow processes, the firm can further streamline this normally cumbersome process.
Specific guidance on using electronic signatures can be found on the IRS site:http://www.irs.gov/uac/Electronic-Signature-Guidance-for-Forms-8878-and-8879 which we suggest be reviewed by your tax practice leader. We then suggest you contact your tax application vendor to see which combination of equipment and third party applications best integrate with your specific Tax, Document Management and/or Digital Workflow tool (as the vendors in most cases have already implemented solutions in client sites and documented them in their knowledge base articles). We also suggest you query your AAA peers that have already done this and share your findings/success stories on the AAA website so we can all make our firms better!
About the Author
Roman H. Kepczyk, CPA.CITP, CGMA, and Lean Six Sigma Black Belt is Director of Consulting for Xcentric, LLC and works exclusively with accounting firms to optimize their IT infrastructure and internal production workflows within their tax, audit, client services and administrative areas. Roman also partners with firms considering mergers in evaluating the technology and applications of the two entities to identify the optimum composite firm moving ahead. Roman can be reached at firstname.lastname@example.org and 678-495-0508.