My clients have not been too interested in electronic filing in the past and I avoided it because I did not want to add another administrative level for compliance and processing.

This year I am encouraging my clients to file electronically before the IRS mandatory requirement for 2010 returns.

Electronic filing has been going smoothly, but I am concerned about obtaining signatures on Form 8879 for last minute clients in the last few days of tax season. I usually email a draft of the return or post a copy for client review in my web portal.

How do you handle Form 8879 signatures if a client is not in your office when the return is completed and does not have access to a fax or scanner?

Is approval by email or telephone acceptable if I receive Form 8879 within a few days?

I think not, but I am curious how veteran e-filers handle the issue.

Thanks for your input.

asked 03 Apr '10, 16:46

Linda%20Hamilton%20CPA's gravatar image

Linda Hamilt...
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edited 04 Apr '10, 22:34

TaxQueries's gravatar image

TaxQueries ♦♦
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Thanks everyone for taking the time to respond during your busy season. I appreciate having another professional to discuss issues with.

Linda

(06 Apr '10, 23:32) Linda Hamilt...

You must have the signed 8879 in YOUR hands before you transmit the return.

If you don't have it back, you can always put the client on extension until you receive it, but transmitting without a signature is against the program.

And I'm with Cherry, keep the PDF and trash the paper after properly signed.

Helen, EA in PA

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answered 04 Apr '10, 11:14

Helen%20EA%20in%20PA's gravatar image

Helen EA in PA
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Clients have to be familiar with Form 8879.

Form 8879 gives tax preparer permission to e-file clients' tax return.

Federal said by 2011 e-file is not an option but a required/mandatory.

Ironically, not all 50 states are ready for that.

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answered 03 Apr '10, 17:15

Irma%20Miller%20CPA's gravatar image

Irma Miller CPA
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You must get a signature. I'm pretty sure there are methods of "electronically" signing the 8879 through your web portal. Check with your portal administrator. Incidentally, the 8879s you keep (proving signatures) can be digital. I don't keep any real paper I don't have to.

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answered 03 Apr '10, 17:30

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Cherry Comst...
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You are required to have a signed copy of the 8879 before you transmit the electronic file. This form equates to a signed return. I have transmitted on electronic signature (fax or scan), but I don't provide a copy of the client's return to them until the original signature of the 8879 is mailed to me.

I have, on occasion, extended the return until I have received a fax, scan, or original signature on the 8879.

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answered 05 Apr '10, 03:11

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cpaboise
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1

You don't need to wait for the original 8879. IRS says any way coming back to you is good as long as it is on the 8879.

(05 Apr '10, 10:58) Helen EA in PA

To clarify, I will file the return on a faxed or scanned & emailed 8879, but my personal requirement in my practice is to have an original signature 8879 before I provide an electronic copy of the client's return. I do not withhold any copies of completed returns, but I will not file a return without some form of signed 8879.

(11 Apr '10, 19:10) cpaboise

The IRS requirement is that a taxpayer must be provided with a copy of the return when they sign the Form 8879.

(16 Aug '10, 09:46) Bill-EA

First and foremost, while we do need to provide services our clients want, remember this is YOUR busienss and when you let clients tell you how to run it you're asking for trouble.

The first year we did e-filing everyone cried. The second year we instituted an ADDITIONAL $50 fee to prepare a paper return for filing and told client that the IRS was mandating the use of e-file - out of 400 client ONLY one paid the $50 extra fee. We've raised that fee for them every year - last year, when we said the paper filing fee was going to be $150 THEY agreed to e-file. Now the only paper returns we file are ones that MUST be filed on paper (like the FTHBTC Returns - and since they MUST be filed on paper we do NOT charge a penalty fee to prepare those returns).

The law is very clear on the signature forms - you are supposed to have them IN HAND before you e-file. They can be mailed to you, faxed to you, scanned and e-mailed to you - however you get them, you really need to get them.

Of course, like driving 90-MPH, you CAN e-file without them BUT if you're caught I understand the fine is up to $10,000 PER INCIDENT and possible suspension or revocation of your license to do tax work. So BEWARE!

The law also requires that the client review the return BEFORE signing the 8879 - so you can't make them sign before you give them the return to review. What we do is print the return to a PDF file (we bought the full copy of Adobe Acrobat), extract the e-file signature authorization pages (8879 for Federal, EL101 for Maryland - and so on for the states). Then we save the actual return but secure it so it CANNOT be printed, only viewed on screen. We do save the e-file authorization forms so they CAN be printed. Then we enclose all of this in an encrypted envelope (adobe does this) and e-mail the whole thing to the clients.

They can view their returns on screen but cannot print them, but they can view and print the signature forms. When they return the signature forms to us, ALONG WITH PAYMENT, we then e-file the returns and send them a final copy of their returns which they can print.

Keep in mind that WE all train out clients to treat us the way they do. If we train them to do things correctly our lives are easier. If we train them to run all over us then we get what we deserve.

And YES - sometimes clients will return the signature forms without payment. Whether I e-file the return without payment will depend on the client. ALL NEW clients, without exception, MUST pay before I'll e-file OR unlock an electronic return so they can print. Payment is accepted by credit card (which I HATE to do), debit card, check AND Refund Transfer.

A note about Refund Transfer - this is NOT a refund anticipation loan. Rather, a bank set up for this receives the client's refund, removes our fee and a $35 convenience fee and transfers the remaining balance to the client. It costs the client $35 but SO WHAT - its still cheaper than using a credit card.

And ocassionally a refund with out fee will get intercepted by the authorities for unpaid child support or student loans. In those cases we go back to the clients. Fortunately, we have not (YET) been stiffed by a client on a fee that was coming from a refund transfer.

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answered 05 Apr '10, 16:04

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edited 12 Apr '10, 17:44

Do you ever have a client return a signed 8879 without payment? If so, do you file the return?

(11 Apr '10, 19:14) cpaboise

I also add a watermark to the PDF file so that the return cannot be printed and mailed. I can easily hack the password from such a file.

(16 Aug '10, 09:47) Bill-EA
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Asked: 03 Apr '10, 16:46

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Last updated: 12 Apr '10, 17:44