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]The question comes up frequently—for example, when forming a new S corporation, forming a new QSub, or structuring an F reorganization pursuant to Rev. Rul. 2008-18. But there is little to no guidance that clarifies the signature requirements for such forms. Historically, the IRS has required hand-written, or original, signatures to make such tax elections, but it’s been unclear whether original signatures were required to be wet.
When looking to answer any tax question, we must first look to the Internal Revenue Code and Treasury Regulations. Treas. Reg. 1.1362-6(a)(1) and 1.1361-3(a)(2) simply require that a S election or QSub election must be signed by whomever is authorized to sign the S corporation’s tax return. An authorized person generally means a company’s president, vice president, treasurer, assistant treasurer, or the chief accounting officer, under Treas. Reg. 1.6062-1(a)(1).
But is a wet signature required, or would a faxed signature, photocopied signature, or an electronic signature be sufficient? If a taxpayer signed a QSub election, faxed it to its tax lawyer, and the tax lawyer printed and mailed the election to the IRS, would the signature meet the requirements of Treas. Reg. 1.1362-6(a)(1)? The tax code and regulationsare silent on this issue.
The IRS has implied that Section 6061 and Section 6065 require wet signatures on all documents unless otherwise indicated, pursuant to Rev. Proc. 78-29, SCA 200137053, and SCA 200117036. However, they do give the IRS broad discretion to prescribe the signature requirements for any return, election, or other document.
This allows the IRS to prescribe faxed signatures on returns, elections, or other documents, such as an S election or a QSub election, pursuant to SCA 200117036 and CCA 200518079. This policy aims to reduce the administrative burden for the IRS and the taxpayer, as well as the time it takes to resolve taxpayer cases and inquiries, pursuant to CCA 201125022 and generally Rev. Proc. 2005-39.
While the IRS has, for lack of a better term, hidden the ball with respect to S election and QSub election signature requirements, a few nontraditional sources of guidance can shed some light on the rules. The IRS manual’s Section 3.13.2.2 (01-01-2023) states that “a faxed signature is acceptable on Form 2553 [and] Form 8869.” While the manual generally dictates the conduct of the IRS, the manual itself isn’t legally binding under United States v. Horne. But the manual’s position is reiterated in multiple non-precedential—but insightful—pieces of guidance.
In agreement with the IRS manual, CCA 200912026 states that “a facsimile signature is an exception to the general rule of requiring a manual signature.” And in CCA 201125022, the IRS concluded that “faxed signatures are legally sufficient” and therefore equivalent to an original signature for purposes of filing Form 2553. In SCA 200117036, the IRS came to the same conclusion, holding that a faxed signature is simply a copy of the original signature, and therefore qualifies as an original signature under Sections 6061 and 6065.
SCA 200117036 also suggests that a photocopy of an original signature should be treated the same as a faxed signature because a photocopy, like a fax, is simply a copy of an original signature. This position is supported by PLR 201917004, Rev. Proc. 2015-13, and PLR 201314016, where the IRS similarly concluded that it would accept an “original signature or a photocopy of the original signature.” This is not a new position—in the 1970s, in PLR 7723032, the IRS treated a fax and a photocopy as the same when analyzing original signatures.
Now that we have established the IRS’ position on faxed signatures, one may think an electronic signature should be sufficient as well. But as illustrated above, there is a lack of clear guidance in this area, so taxpayers and practitioners must read through the lines to properly comply with the rules.
In August 2020, the IRS issued a notice holding that certain documents may be submitted with electronic or digital signatures due to the Covid-19 pandemic. While the notice included about 40 different returns, elections, and other documents that now could be signed electronically (that historically could not), notably absent from the list were Forms 2553 and 8869—the S election and QSub election forms. This indicates that e-signatures for S elections and QSub elections haven’t been blessed by the IRS just yet, and taxpayers and tax practitioners should continue to only use wet signatures, faxed signatures, or photocopies of signatures to ensure compliance.
All available guidance shows that a faxed signature or a photocopy of a wet signature should satisfy the original signature requirements to file an S election or QSub election. This should come as a relief for taxpayers and tax practitioners alike, since it allows them to avoid the hassle of obtaining and mailing in wet signatures.
This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.
Author Information
Zachary M. Nolan is a tax counsel at Greenberg Glusker in Los Angeles who advises clients on a wide range of federal, state, and international tax issues, including entity selection and formation, financing, restructurings, mergers and acquisitions, cross-border planning, and tax-efficient dissolution.
Sally C. James is a corporate partner at Greenberg Glusker, primarily in the entertainment industry. She handles large film finance and M&A transactions for established Hollywood brands and negotiates deals for entertainment start-ups.
Michael Wiener is a partner in Greenberg Glusker’s corporate, finance and securities practice group. His practice focuses on structuring real estate and corporate transactions in a tax-efficient manner.
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When Rene Rodriguez desired to turn into a U.S. citizen, his brother Raul — with nearly 25 many years doing the job for the authorities, serving his nation, and who managed a clean up prison document — seemed very well-positioned to assistance.
Raul Rodriguez, 54, walked briskly through downtown Brownsville one particular December afternoon recalling the periods he sat within the business office of the Gateway Intercontinental Bridge the place he labored as a U.S. Customs and Border Defense officer interpreting immigration law for the Business of Industry Functions, or OFO.
OFO officers inspected autos coming back again from Mexico that warm working day, a task that while bodily tiring was most popular by lots of in comparison to Rodriguez’s duties.
“They alternatively be in the heat and chilly examining cars than remaining inside in the AC processing,” he explained.
Folks with visas, asylum requests, questionable files, or no paperwork ended up ahead of Rodriguez. As a passport controller he began the lengthy investigating approach.
“It generates a stack of paper about this massive,” he said, stretching his palms the length of an accordion. “There’s hundreds of varieties that you have to fill out. And you have to memorize people kinds, in which to get them.”
The job required a ton of creating, analysis and juggling many deadlines.
“You had to study how to manipulate the regulation to in shape what you were being doing,” Rodriguez explained. “Because you have to know the part of the law that you’re implementing to that scenario, and you really don’t utilize the exact regulation to all scenarios. So you have to obtain the ideal a single.”
Rodriguez did not intellect the challenging get the job done. He grew up combating to survive.
As the boy or girl of a battling farmer just east of Nuevo Progreso, foods was not normally available.
“We ate a whole lot of stuff that typical folks will not take in simply because we had been hungry,” Rodriguez recalled.
Massive rats from the “monte,” quelite, a plant that tasted like spinach, badgers, raccoons, rabbits, doves, fish and nutria (a substantial rodent) aided retain the family members nourished.
Rodriguez lived with his parents for five decades just before he was despatched to his aunt and uncle in Mission, so he fashioned handful of recollections of his mothers and fathers, like his father.
“He built a whole lot of poor choices,” Rodriguez reported. Gambling, liquor and domestic abuse were burdens he recalled his mother shouldered.
His mom, though not emotionally expressive, cared for her children, Rodriguez recalled.
When Rodriguez commenced performing for the governing administration, he tried using returning that tenderness by sending cash and assisting correct his parents’ house.
Rodriguez’s commitment to his loved ones and perform was rewarded with accolades, but some noticed his heritage, darkish pores and skin and Spanish identify as suspicious.
Wintertime Texans returning from Mexico via the global bridge spurned his compulsory citizenship issue by questioning Rodriguez’ authorized status. Border Patrol agents who saw him close to the border would talk to to see his paperwork and validate his citizenship.
At work, the inquisitiveness was relentless.
CBP officers would tease, “I bet you you’re illegal,” Rodriguez reported. Then one working day a person referred to as him nutria, massive rodents that swim in Valley canals, ponds and rivers.
“They’d say,” Rodriguez recalled, “Hey, how do you maintain the uniform dry?”
Some would phone him an OFC, initials that stand for formal false declare. U.S. regulation states that if somebody helps make an formal untrue claim to citizenship they can in no way grow to be a U.S. citizen.
Rodriuez felt it was suggest-spirited, but he didn’t permit it bother him.
In 2009, when his brother Rene wanted to develop into a U.S. citizen, Rodriguez began the legal and many years-very long method to petition for him.
Then, 1 working day in 2018, the officer who served process immigration papers for many years, even aided deportations, was himself identified to be in the nation illegally.
His brother’s case was terminated, but Rodriguez confronted larger outcomes.
In the eyes of the U.S. govt, Rodriguez lied about his citizenship, falsely saying to be a citizen in the region. It was plenty of to get started deportation proceedings.
“I signed a blank test to this nation, but this nation did not give me that similar loyalty,” Rodriguez stated. “It wasn’t just a work, it was a responsibility to follow that oath to the most effective of your capacity. And if that implies dropping your life, that is what it is.”
CBP put him on go away with no fork out, even though he would ultimately eliminate his career.
“From one particular working day [to the next] they taken care of him like he was the worst point that at any time happened to them without the need of remembering all the matters that he did for them whilst he was operating for CBP,” Jaime Diez, Rodriguez’s immigration lawyer, reported.
In the 30 several years Diez has labored as an lawyer specializing in immigration, this was a initial.
Rodriguez, acquainted with immigration regulation but unfamiliar with his individual standing, has put in the final virtually five yrs pleading with immigration courts although questioning why his dad and mom in no way explained to him the truth.
Rodriguez’s mother died in 2013, before his position was revealed. The tension grew and even more strained the romance with his father.
“He however won’t admit that what he did was mistaken,” Rodriguez mentioned.
He is unsure about the good reasons he was despatched to the U.S. A further sister was similarly given away in the family that grew in spite of poverty-stricken situations.
The 1st year was the most difficult, Rodriguez admitted.
Rodriguez and his wife, also a CBP officer, worked challenging to shrink the price range based on two government salaries. They refinanced their residence and relied on the Hazelwood Act to help with tuition. That same 12 months, Rodriguez was identified to be 100{c024931d10daf6b71b41321fa9ba9cd89123fb34a4039ac9f079a256e3c1e6e8} disabled by the U.S. Section of Veterans Affairs, a designation that assisted economically.
Shedding the job bore higher importance than just a paycheck, however.
“You’re losing your identity,” Rodriguez spelled out. “It was just about 25 many years of federal service, just to notify you, you’re no for a longer time an officer. You’re no lengthier in Customs. All I saw was that my badge was shed, then I did not have my badge and my gun anymore, which plays a large function in law enforcement.”
Former U.S. Customs and Border Safety Officer Raul Rodriguez stands in entrance of Gateway Worldwide Bridge in Brownsville on Wednesday, Dec. 14, 2022. (Miguel Roberts | The Brownsville Herald)
For Rodriguez, the badge and gun have been totems of a group.
“You really do not socialize with persons other than law enforcement, since regulation enforcement usually takes treatment of legislation enforcement,” Rodriguez mentioned. “Everybody would see me in town, and they just kind of — I knew they understood I was there — they just turn close to like I was not there, or they go the other way. And, and it harm to see that, that what you believed was your full globe just kind of like [was] no longer there.”
As he labored to cope with his social existence, Rodriguez and his attorney were also striving to uncover approaches to hold him household in the U.S. with his wife, two small children and grandchildren.
It wasn’t as straightforward as striving to appear in as a husband or wife to an American citizen, Diez reported.
“The government’s placement was that because he claimed to be a citizen, even even though he did it with out knowing that he was not born in the United States, he could not turn into a authorized permanent resident via this way,” Diez explained.
“It tells you how messed up this procedure is,” Diez stated. “When I hear individuals say, you know, you will need to do it the suitable way. I imply, I choose it individually mainly because they have no strategy what they’re talking about. And I feel this case tells you that. It tells you that regretably, the laws are so archaic and so unfair, that they really do not deliver for anyone, for a large amount of folks an prospect to have a possibility to keep in this article.”
Lawfully, Diez attempted anything that for a lot of would not function. Rodriguez certified for the course of action, “but Cancellation of Removing is also not the least complicated detail to receive.” Most folks never satisfy the threshold, his legal professional mentioned.
In order to qualify, an applicant requirements to present they’ve been in the U.S. for 10 a long time, have a excellent moral character — an quick standard for Rodriguez to satisfy with his military services and federal service records — and show that deportation would lead to extraordinary hardship on the wife or husband.
“In this scenario, we had been able to exhibit that he satisfied individuals 3 specifications, primarily in the case of his wife,” Diez mentioned, referring to Rodriguez’s wife — a CBP agent also participating in a part in immigration. “His spouse was a United States citizen. And if he was despatched to Mexico, his lifetime would be in threat. Because the do the job that her partner did though operating from CBP makes her a goal for for retaliation and hence, it was crucial for him to be able to continue to be in this article with his spouse, so that his spouse would not have to shift to, not have to go to Mexico to see him and be set in a problem in which her lifetime would be in threat.”
Even though Diez worked on his authorized case, Rodriguez looked internally and recognized a transformation was having hold.
“Many factors have adjusted towards my views to this government, my loyalty. It’s not only me. It’s opened my eyes to many other things,” he mentioned.
When he looked around, he found he was not alone.
“There’s hundreds of veterans who have been deported. I did not even know they experienced deported veterans,” Rodriguez explained.
A community followed that realization.
“Other people start out to arrive into your circle fully opposite to what you experienced,” he stated.
New friends came from hundreds of miles absent.
Diane M. Vega from El Paso browse about Rodriguez’s problem when his wife shared their tale on social media three decades ago. She is the chief functions and outreach officer of Repatriate our Patriots, an firm serving to veterans stay clear of deportation.
Vega, who served in the Air Force, was acquainted with the emotion of disconnection.
“Anyone that has at any time served in the navy [will know] you never ever come again to civilian life. You will under no circumstances changeover again to civilian daily life,” Vega claimed.
“I believed it was an oxymoron — getting yet another cog in the enormous immigration system, a incredibly damaged technique,” she explained of Rodriguez’s circumstance. “And his tale is a single to validate that of how damaged our immigration procedure is in the United States.”
All the understanding Rodriguez obtained from his work was repurposed when he related with Vega.
“It’s presented me a new glimpse at existence,” Rodriguez explained.
Unresolved agony invisible to health care practitioners concentrating on the human body led quite a few to self-medicate, material abuse and domestic abuse, Rodriguez and Vega reported.
“Not all traumatic injuries are actual physical. Some are mental and psychological,” Vega reported. “That drives men and women to drug abuse, alcoholism and harmful behaviors. They finish up in the legal justice system and that’s how so several of them get deported.”
Rodriguez and Vega are vital of the treatment veterans don’t receive that lead them astray.
“They’re not terrible persons,” Rodriguez stated. “It’s just that they were caught in the exact same scenario I was. And they are fighting the governing administration as I am.”
The corporation also aids by furnishing legal aid. Right here, Rodriguez finds his experience handy.
“Same job, diverse concentrate,” Rodriguez discussed. “Instead of attempting to kick them out I’m attempting to carry them in now.”
In mid-November, Rodriguez went in advance of an immigration decide once again. This time, instead of dealing with roadblocks, he acquired an apology.
“I think that the judge was telling him by indicating that she was genuinely sad to see that in some cases we have conditions like this, or recognition that we have situations like these that make certainly no sense,” Diez recalled.
Following decades of trimming funds, performing by means of an identity disaster and a strained father-son connection, Rodriguez emerged with a exceptional win: he competent for cancellation of removal.
“In most situations, you don’t get this end result,” Diez stated. “You will get deported.”
Rodriguez will however require to exercising endurance though he waits to grow to be a authorized long lasting resident and eventually applies to turn into a naturalized citizen. For now, Rodriguez carries an employment authorization allow and can vacation the state, independence he interprets as an prospect.
Vega, with Rodriguez’s assistance, will operate towards expanding Repatriate our Patriots in the coming calendar year.
“There’s a ton of stories of persons who served in the navy, served below distinctive names. They had been not U.S. citizens, and did it with honors. And nevertheless they conclusion up in this process of even although you serve, they are however regarded unlawful, they are however thought of fraudulent enlistments,” Vega said. “So, their company to this state, in accordance to the govt, isn’t recognized.”
“My life’s altered,” Rodriguez stated. “I was quite bitter when I was doing work for the governing administration. I was upset. I was stressed out. And now that I’m undertaking this or that I’m attempting to do some thing unique, it makes me really feel superior. My spirit is far better.”
WASHINGTON — Senators on both sides of the aisle acknowledged Wednesday that the immigration system stays problematic when it arrives to recruiting and retaining immigrant healthcare staff, but they differed on what demands to be completed about it.
“Even as we face unparalleled shortages in our healthcare procedure, the legislation that limit the immigration of highly experienced healthcare employees have absent mostly unchanged considering the fact that the 1990s,” Sen. Alex Padilla (D-Calif.), chair of the Senate Judiciary Subcommittee on Immigration, Citizenship, and Border Basic safety, claimed at a subcommittee listening to on “Flatlining Treatment: Why Immigrants Are Very important to Bolstering Our Overall health Care Workforce.”
“There continue on to be major backlogs in processing eco-friendly cards for important healthcare workers. There are once-a-year caps to employment-centered visa classes that have not been fulfilled, and for each-country caps that should really be up-to-date to satisfy the needs of today’s health care field,” he famous.
Workers Are Struggling with Uncertainty
Padilla stated that he and fellow committee member Sen. Dick Durbin (D-Sick.) have released the Citizenship for Important Staff Act, which would let vital healthcare personnel who worked throughout the COVID-19 pandemic to apply for and get long term resident status. The bill also lets for purposes for long-lasting resident position from parents, spouses, and small children of qualified immigrants who died from COVID-19.
“Several of the federally acknowledged central personnel that we relied on at the peak of the COVID-19 pandemic still possibility uncertainty with their legal standing in The usa,” stated Padilla. “In our hour of need to have, the United States is correctly discouraging prospective health care employees from seeking to occur to and do the job in the United States. That requires to transform.”
But Sen. John Cornyn (R-Texas), the committee’s position member, did not see it that way. “I won’t be able to visualize a route ahead until we locate some way to offer with the crisis at the border, which is essentially a coverage trouble due to the fact of the way that asylum cases are dealt with,” he reported. “At some place, we will have tried almost everything except the serious remedy to the problem — which will crack the logjam — which is to offer with the problem of catch and release and the damaged asylum program at the border. Then maybe we can deal with issues” like bills that have an effect on the immigrant health care workforce.
One Immigrant Doctor’s Knowledge
Subcommittee associates listened to from Ram Sanjeev Alur, MD, a hospitalist at the Marion, Illinois Veterans Affairs Healthcare Heart. “I arrived to the States in 2007 on a J1 visa as an exchange customer from India for my professional medical residency schooling,” he stated. “Trade website visitors are normally expected to depart the United States and return to their household state after completing their residency except they can get hold of a waiver of that necessity by using a determination to get the job done in an underserved location for 3 decades. I selected to get the job done in an underserved region and was fortunate adequate to attain a waiver to stay in the States.”
On the other hand, Alur reported, he and his household have had challenges when it arrives to remaining in the U.S. “Medical professionals like me are on a temporary get the job done visa identified as H-1B,” he mentioned. “The H-1B visa only lets us to get the job done in a specified locale. Any operate outside the house the specified place is deemed a violation of a work allow.” He observed that throughout the pandemic, he could not reply various calls for reinforcements for close by hospitals mainly because the visa prerequisites would not permit him to.
“The H-1B visa permits me to continue to be in the state with my family lawfully since of my legitimate non-migrant employee standing,” he included. Nevertheless, “if I cannot work, we won’t be able to keep. This deficiency of protection with death or incapacity on the entrance lines is each short term visa worker’s nightmare. The H-1B visa also can make it hard for us to journey outside the region. The last time my spouse and I saw our growing older moms and dads was in 2019 … My petition for permanent residency was permitted in 2016 simply because it was in the countrywide curiosity dependent on my do the job at the VA. Nonetheless, we even now have to hold out for an immigrant visa range or a eco-friendly card to turn out to be obtainable and I have been waiting 6 decades, doing the job 11 yrs, and been in the nation for practically 15 many years. My wait could be a different decade or far more.”
Legislative Alternatives
Sarah Peterson, an legal professional at an immigration legislation company in Minneapolis, outlined other problems with the technique. The nation’s physician lack “is properly documented and proceeds to increase because of to a variety of elements, such as our ageing inhabitants, which both equally improves the number of folks looking for care as properly as the quantities of doctors all set to retire,” she stated. “In the next ten years, far more than two out of 5 lively medical professionals will be 65 or older. This crisis is only compounded by the growing COVID burnout by our frontline employees.”
In addition, “a lot more than 95 million men and women live in healthcare shortage areas — that’s 1-3rd of the United States,” Peterson noted. “This number will continue to grow. And by 2034, the U.S. will encounter a lack of up to 124,000 medical doctors.”
Although present guidelines “supply a compact quantity of Conrad J1 [visa] waivers for physicians to continue to be in the U.S. centered on their perform in underserved communities, each and every state only receives 30 Conrad J1 waivers each individual 12 months, which is simply just not sufficient. More, our rules ought to inspire and reward global doctors who do the job in underserved communities by getting rid of numerical quotas,” she included.
She advocated for passage of two expenses, each with bipartisan sponsorship: the Health care Workforce Resilience Act and the Conrad State 30 and Medical professional Access Reauthorization Act. The to start with monthly bill would make beforehand unused immigrant visas accessible to nurses and medical professionals who petition for these a visa no far more than 90 times after the close of the COVID-19 general public health and fitness crisis, although the 2nd bill would give states the capacity to grant Conrad J1 visa waivers centered on want, relatively than restricting them to a precise variety.
“Very last year by yourself, additional than fifty percent of the states thoroughly exhausted their source of Conrad J1 waivers, leaving needy People without having obtain to healthcare,” Peterson mentioned. “Medical professionals who are not granted a Conrad waiver in most occasions must depart the U.S. probably never ever to return.”
Padilla concluded the hearing by declaring that Congress was able of repairing both the difficulties at the U.S. border and the concerns with the immigrant workforce. “We can do both and we must do each,” he explained. “For the 95 million People dwelling in sites with a lack of health care experts, we are not able to afford to pay for to wait. It is really not just health, but lives that are at stake.”
Joyce Frieden oversees MedPage Today’s Washington protection, such as stories about Congress, the White Home, the Supreme Courtroom, healthcare trade associations, and federal agencies. She has 35 years of practical experience masking wellbeing plan. Follow
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