I have a CPA firm, how do i get documents signed (IRS compliant) through the Portal?

Great question, first lets cover some basics:

"E-sign" means a physical signature on a signature pad connected to a computer at the CPA firm's customer counter (or on a CPA owned tablet). This is not what we are after in this article.

A simple "DocuSign" is no longer sufficient for remote electronic signatures on tax documents according to https://www.irs.gov/pub/irs-pdf/p1345.pdf (see pages 21-24) because these qualifiers must be met and kept on file: digital image of the signed form, date/timestamp of signature, taxpayers computer IP address, taxpayers portal username, user passing challenge authentication questions, and audit trail of the signature. The challenge authentication questions are (to prove identity): name, social security number, address, date of birth. Three failures to match the challenge questions must result in an in-person signature for the document.

There are 2 ways to get signatures (IRS compliant) through our Portal:

1. The User prints the form, physically signs it, and scans it back in to the portal (using a scanner or taking QUALITY pictures with their camera phone). The User retains the hardcopy for their records in the event of an IRS audit.

2. The third-party accounting software in use must be able to produce a PDF that has the proper identity challenge questions/answers embedded, which must be fulfilled by the User prior-to saving of the signature to the PDF residing on the Portal. What specifically you are wanting is a 'remote electronic signature' with 'identity verification' that fulfills the IRS requirements. Consult with your accounting software vendor as to whether their product can produce such a PDF/file, and ask if there are any restrictions on the transmission of the produced file*.

You may be able to find or produce a third-party solution (we do not have one to recommend at this time) to append the necessary challenge questions WITH the required encoded answers to a standard tax software produced PDF that includes DocuSign, but having to populate a 2nd database of customer info or manually entering the necessary challenge responses at the time of document appending to such a software is likely time-prohibitive. You could have the challenge questions-only fields appended to the PDF (with DocuSign) - then only consider the form's signature as accepted by your firm, once the filled answers were manually verified against your existing tax software database (which again is likely time-prohibitive, and increases your liability of the document transaction).

*Not all tax softwares allow for their produced files to be used outside of their own systems. For example: Drake software is a canned/captive system that does not co-operate with other systems in regards to 'remote electronic signatures'. Drake software can produce such a file, but the files can only be produced if their own portal is in use, and then can only be placed within their own portal. You have to have Drake Documents, Drake SecureFilePro [portal] (there are fees involved for this addon), and the Drake 'remote electronic signature option' addons as well as have a purchased batch of 'electronic signature events' at a cost of [at the time of writing of this article] $2.50 per signature event (1 user signing a single document = 1 signature event consumed), which are purchased in at batch of 500 (to get that price down to $2.50 each). We do not have pricing information on the white-labeling/branding of the Drake portal at this time.

Drake footnote: As mentioned above "E-sign(ing)" (an industry term) is an entirely separate solution from 'remote electronic signature'. Drake occasionally refers to their 'remote electronic signature' solution as "remote eSign", which makes it very easy to confuse "E-sign" with "eSign".

The names Drake, DocuSign, IRS, and SecureFilePro are used for educational purposes.