Thanks to electronic documents and signatures, we can now deal with and finish tax season faster and easier than ever before.
However, this only works when we’re aware of all the rules and requirements that the Internal Revenue Service has for electronic tax filing and signing.
In this post, we’ll figure out what the requirements are for e-signing tax forms, what services are IRS-compliant, and what points you should consider when choosing an e-signature solution for filing your tax return.
As always – it’s all is about security
You may not be aware of this, but in 2014, 2.7 million taxpayers reported identity theft. And today, identity security (both on and offline) is getting better. But still, data breaches occur quite often.
So without further ado, here are several rules you should follow when it comes to the security options of your e-signature provider.
E-signature providers should require identity details
In the case of remote signing, the e-signature solution should use special authentication methods to verify the identity of the taxpayer.
SignNow uses multi-factor authentication. This is a security measure that requires multiple levels of identification, and ensures that the user is who they say they are. Essentially, multi-factor authentication uses more than two forms of authentication to get the trusted users in and keep the wrong users out.
SignNow requires the signer’s email address, full name, SMS code or voicemail verification, and fingerprint login verification.
SignNow ensures that your signer is the correct person by calibrating their identity authentication, and specifically meeting with the IRS regulations; in a word, we at SignNow will go to great lengths to protect your identity no matter the cost.
E-signatures have to be valid and tamper-proof
Ok, so the next critical point here is to ensure that the e-signature provided by the taxpayer is a valid one. Check the list of necessary compliances HERE.
Also, it should be impossible to remove, copy or transfer an e-signature in order to falsify a digital record.
For example, once a document is electronically signed through SignNow, the document becomes tamper-proof to prevent it from being modified in any way.
Additionally, SignNow stores your documents with an index, and this gives you the ability to reproduce copies of your documents for archiving purposes and for storing electronic records.
I’m a small CPA firm and require signatures on engagement letters and confidential tax documents. I’ve tried other solutions but some of my clients found the other solutions a bit clumsy. I’ve received very positive feedback once I switched to SignNow. I also really appreciate the option to choose ‘do not send signed documents’ for confidential information. It’s a great choice for CPAs, Attorneys and anyone else needing a secure yet easy-to-use solution. It’s also IRS compliant
E-signature vendors should record a document’s history with audit trail
A good e-signature provider should make it possible to quickly and easily check all document changes and signing events by downloading the full audit trail for each of your documents.
By downloading a document’s history, you’re able to view timestamps and IP addresses associated with any actions performed on your document.
SignNow’s e-signature technology records the date and time of the e-signed document, the computer’s IP address, and the verification of the user’s identity. SignNow’s audit trail reflects the full completion of the e-signature process, and is a highly comprehensive and easily-accessible data trail.
So SignNow’s e-signature platform establishes a reliable, trustworthy, and secure process for identifying signers, reviewing a document’s history, and preventing identity theft or any company fraud.
Keep in mind all the points mentioned above to make sure that all your taxes are kept under solid protection.