Client Copy of the Return

[Koss]

In a different thread, taxea wrote:

I don't sign client copies and I recommend to the client that they not sign them when they are providing them to a third party. The reason for this is that the client copy, though a replica of the filed copy, is not the original filed copy which was e-filed and therefore does not require a manual signature. The only time I or the client signs a copy of the return is when the return is requested by the IRS. They want a signed copy.

I agree that the client copy does not need to be signed by the preparer.

But they may have the right to a signed copy of Form 8879. I'd have to look that one up.

Student loan servicers and financial aid officers routinely require students and their parents to produce a signed copy of their tax return, and some have been known to insist that they produce a copy that is also signed by the preparer. I don't know whether they have any statutory authority to make such demands. But the reality is that they do. I'd love to hear about a case where the student complies by signing the tax form himself, but then says that he can't obtain the preaprer's signature because the preparer is out of business, or deceased...

I have seen some financial aid guidelines that are finally staggering into the 21st century, where it says that you can submit a signed copy of the e-file authorization, or declaration, or whatever it is called. That's Form 8879. And of course they still want the entire return, but they are acknowledging that the signatures may show up somewhere other than at the bottom of Form 1040.

But if you do a Google search, you'll find hundreds of references on financial aid websites at universities, stating that the student must submit a signed copy of their tax return.

They will accept signed documents that are marked with a "copy" stamp, or a watermark, which is available in almost all professional software now. So they do seem to recognize a distinction between a copy and an original...

BMK
I

[oceanlovin'ea]

I give the client a copy of their tax return and a copy of the signed 8879. I have them sign 2 copies of the 8879, one for me and one for them. That was the way I was taught to do it.

The only time I actually sign a 1040 is if it has to be mailed in. I also sign a 1040X. In those cases, I sign their copy of the form also just in case they need a signed copy.

Linda, EA

[Burke]

I agree that the client copy does not need to be signed by the preparer.But they may have the right to a signed copy of Form 8879. I'd have to look that one up.BMKI

If anyone knows this I would appreciate some input, as a new 8879'er. Is there a cite?

[Bees Knees]

If anyone knows this I would appreciate some input, as a new 8879'er. Is there a cite?

Under the practitioner PIN method, Part III of Form 8879 requires the ERO to sign the form. The instructions for Form 8879 on page 2 under ERO responsibilities says:

5. After completing items (1) through (4)
above, give the taxpayer Form 8879 for
completion and review. This can be done in
person or by using the U.S. mail, a private
delivery service, fax, email, or an Internet
website.

I take this to mean we have to sign Form 8879 as the ERO before giving it to the client (along with a copy of the 1040) for review. The client then reviews the return, signs Form 8879, and then gives it back to us to authorize us to e-file the return. The instructions then tell the ERO to retain a copy of the signed Form 8879.

Although it does not specifically say to give a copy of the 8879 back to the tax client after e-filing the return, I mail them a copy of the signed 8879 along with the IRS acknowledgment that says their e-filed return was accepted. This procedure assures the client that I did in fact e-file their return, and the IRS did in fact accept the return as filed. It is also the only Form that I sign, and so giving the client a copy of the signed 8879 in my opinion is the same as giving them a signed copy of the 1040 that I prepared for them. Even if it is not required, I believe giving them a signed 8879 and IRS acknowledgment is a service our clients appreciate and deserve.

[Burke]

Although it does not specifically say to give a copy of the 8879 back to the tax client after e-filing the return, I mail them a copy of the signed 8879 along with the IRS acknowledgment that says their e-filed return was accepted.

Thanks for your input. And so, another step in the process is added....and my clients tell me "do whatever is easiest for you!" (efile or paper-file).

[Koss]

Form 8879

I don't have a citation right now. I'll see if I can find one...

I'm gonna stick my neck out and say that this is not a serious issue.

The regulations are very clear that you must give the client a copy of the return. I don't think the regs require the copy to be signed by the preparer.

Form 8879 is arguably part of the return. If you leave that form out of the client copy, but give them everything else, I think you are actually in substantial compliance, because Form 8879 is purely a procedural device for electronic filing. There is nothing on Form 8879 that isn't in the tax return itself. But the form is something that they are signing, so they should get a copy.

But from a technical standpoint, I think the client copy of the return should inlcude a copy of Form 8879. I don't think the return or the 8879 have to be signed when you provide the copies.

As a practical matter, if a client asks for a signed copy of the Form 8879, I think you probably have to provide it. But if the client does not request it, I don't think their copy has to be signed.

In my office, we do everything as paperless as possible.

Some clients do business with us by fax, where we send them the 8879, and they sign it and fax it back. Our faxes go to a server, so they don't get printed unless there is a compelling need. Our copy of the 8879 is a PDF, and of course there is a backup.

But if the client is physically present in the office to sign the Form 8879...

Then the client and the tax pro sign a single paper Form 8879. We then scan it.

The scanned image becomes the one we keep for the office. The client gets the "original" document which has both signatures...

So it really turns everything on its head. This is kind of what I was talking about in an earlier thread, where I said that in many cases, the original instrument is an electronic document. Our clients take home the only paper Form 8879, which happens to bear "original" ink signatures. But that piece of paper is the "client copy" of Form 8879. The "original" Form 8879, which we keep in our office, is a PDF image.

Doing it by fax is totally acceptable, and that's in IRS Publication 1345. Scanned images are acceptable records.

The fax process raises other, more complicated questions. The regs are pretty clear (although I don't have a specific cite right now) that you have to give the client a copy of the return before it is filed, and that the client must review the return before signing the Form 8879.

So regardless of how well you know the client, or how many years you've been doing the return, it is arguably unacceptable to fax the client just the Form 8879 for their signature, and then provide a complete copy of the return later, i.e., by mail, or on disk, or when they visit your office.

I do think that if you do a return while the client is sitting at your desk, and e-file the return immediately, which is common practice at HRB and many other storefronts, that you are in compliance when you review the return on the screen, and then provide a paper copy, or a disk, a few minutes after they have signed the Form 8879 and the return has been transmitted.

But if the client signs the 8879, and you e-file the return without giving the client an opportunity to review the return first, you may have a problem down the road.

With that being said, if the client has income that is only from Forms W-2, and no dependents, and takes the standard deduction, etc...

then there really isn't much in the return that's not on Form 8879.

So it might... kinda sorta be okay... in some cases...

But the client really should see the entire return before they sign Form 8879.

And that can be a challenge when you fax the 8879, because some clients really don't want to get a 20-page tax return on a traditional paper fax machine. And if you insist on sending it, they may not review it before signing the 8879 anyway...

These are subtle issues, on the bleeding edge of our digital, paperless world, that are in a state of flux. I don't think there's a lot of clear answers.

BMK

[BP.]

"Must sign" is one of the listed requirements here:

http://www.irs.gov/newsroom/article/0,,id=120129,00.html

[ChEAr$]

The signature is the main tihng.

As an ERO, IRS and state authorities required us to be their repository for those signature forms and do not required anywhere in writing that we provide client with a copy.

[Koss]

Signatures

BP wrote:

"Must sign" is one of the listed requirements here:

http://www.irs.gov/newsroom/article/...120129,00.html

That means that you must sign the original tax return. The original tax return is either something that goes in the mail, or something that gets transmitted electronically. The rules do not say that we are required to sign the copy that we give to the client.

ChEAr$ wrote:

As an ERO, IRS and state authorities required us to be their repository for those signature forms and do not required anywhere in writing that we provide client with a copy.

In general, I agree. But what you wrote could be interpreted to mean that while we have to give the client a copy of the tax return, we don't have to give them a copy of Form 8879, which is merely a "signature form." As I noted above, there isn't any substantive data on Form 8879 that is not also in the tax return.

But from a practical standpoint, the client probably has the right to get a copy of any document that have signed. Again, I'm not saying we have to give them a signed copy. I don't think that's required. But they should get a copy of any form they have signed. There may even be common law, at the state level, to support this.

In any kind of consumer transaction, I would walk out on them if they asked me to sign something and then refused to give me copy of it.

BMK

[dan doshan]

Interesting thoughts above ... I always thought we were required to sign the clients copy of the 1040 and also their copy of 8879. No particular cite on this, just seems that I have read that somewhere in all the IRS stuff. Anyway I do sign whether I necessarily have to or not.

[BP.]

IRS has several different web pages with "Tips for Choosing a Preparer."
Most seem to include preparer signature language, and while there's distinction between the original copy and the client's copy, but does the public make that distinction, or would they prefer a "signed" copy? They're entitled to a copy.

From IRS, but I lost the link right now:

"Use a reputable tax professional that signs your tax return and provides you with a copy for your records."

[Koss]

Signatures

I have never said that the tax pro should not sign the client's copy of the 1040 or the 8879. In fact, in my posts above, I have suggested that we might be required to provide a signed copy of Form 8879 if the client requests it.

I don't think signatures are required on the client's copy of Form 1040, and this is not merely an intellectual exercise. It has become highly relevant in our paperless office. Many of our clients accept delivery of their copy of the tax return in an electronic format. Usually this means a CD or a flash drive. But we can also provide a password-protected PDF by e-mail. And in rare cases, we may fax an entire tax return. But our fax is a server. We simply upload the PDF that is generated by our software into the fax platform. Regardless of how we deliver it, the PDF generated by our software doesn't contain signatures.

What this means is that if we were required to sign the second page of Form 1040, it would actually add extra work. We would have to print that page, sign it, and scan it. And then we would either have to provide that one-page PDF to the client, separate from the return (which would be a little weird, and a bit unprofessional, in my opinion), or we would have to integrate that scanned page into the rest of the return in a new PDF. That would be a real pain in the ***.

We're not doing that. It is far more efficient to simply provide the complete return as the PDF that is generated by our software, and that return is not signed by the tax pro or by the client.

As I have noted in my earlier posts, our clients generally DO get a signed copy of Form 8879, either on paper or as a scanned PDF.

BMK

[BP.]

our clients generally DO get a signed copy of Form 8879

Yes, and I think that suffices as a signature on the tax return. (i.e, a signed 8879, as opposed to the 1040 p.2)

[Gretel]

From IRS, but I lost the link right now:

"Use a reputable tax professional that signs your tax return and provides you with a copy for your records."

I didn't understand this literally. My software prints my company name on the tax return. I always understood it to not have blanks where the preparer information goes.

[JenMO]

Where do I get an IRS efile acknowlegment that the return has been accepted? I see it in my software (ATX), but what can I print off for confirmation for the taxpayer?