October 24, 2023
On October 17, 2023, the U.S. Internal Revenue Service (IRS) updated its Internal Revenue Manual (IRM) to fully incorporate into the IRM certain e-signature policies and procedures permitting the use of electronic signatures on certain forms, including elections under section 83(b) of the Internal Revenue Code of 1986, as amended (the “Code,” and such elections, “Section 83(b) Elections”). This indefinitely extends the prior temporary relief granted by the IRS that was set to expire on October 31, 2023.
The IRS has historically required wet ink signatures for most tax documents, including Section 83(b) Elections. However, during the COVID-19 Pandemic, the IRS temporarily expanded the forms for which electronic signatures would be accepted. This temporary relief did not extend to Section 83(b) Elections until the IRS issued a memorandum on April 15, 2021 (the “April 2021 Memorandum”) that temporarily permitted electronic signatures on Section 83(b) Elections. The temporary relief provided by the April 2021 Memorandum was initially scheduled to expire on December 31, 2021, but the IRS later extended such relief until October 31, 2023 in a subsequent memorandum. Such relief is now indefinitely extended pursuant to the IRM.
The IRS’ electronic signature policy for Section 83(b) Elections and certain other specified tax forms provides that electronic and digital signatures may take various forms and can be created by different technologies. No specific technology is currently required for Section 83(b) Elections (though specific technologies may be required by the IRM in the future). Accordingly, acceptable forms of electronic signature for Section 83(b) Elections should include a name typed into a signature block, a scanned image of a handwritten signature or a signature created by third-party software (such as DocuSign).
Taxpayers should be aware that the updates to the IRM do not modify the other requirements in section 1.83-2 of the Treasury regulations for making Section 83(b) Elections, including the requirements that (i) the election be filed not later than 30 days after the date that the property that is the subject of the election was transferred and (ii) copies of the Section 83(b) Election be sent via certified mail to (A) the IRS office where the taxpayer files its tax return and (B) the person for whom the services are performed. Furthermore, taxpayers and their advisors should continue to consult the IRM in advance of future filings to ensure that the IRS has not changed its electronic signature policies for Section 83(b) Elections, including by requiring specific technologies.
 IRM 10.10.1, Identity Assurance, IRS Electronic Signature (e-Signature) Program.
 Unless otherwise indicated, all “section” references contained herein are to sections of the Code.
 Section 6061(a) provides that “[e]xcept as otherwise provided by [section 6061(b)] and sections 6062 and 6063, any return, statement, or other document required to be made under any provision of the internal revenue laws or regulations shall be signed in accordance with forms or regulations prescribed by the Secretary.” Furthermore, section 6061(b) provides that “the Secretary shall develop procedures for the acceptance of signatures in digital or other electronic form. Until such time as such procedures are in place, the Secretary may—waive the requirement of a signature for; or provide for alternative methods of signing or subscribing, a particular type or class of return, declaration, statement, or other document required or permitted to be made or written under internal revenue laws and regulations.” While the IRS has created exceptions for certain forms (such as Forms 720, 940, 941, 990, 1040, 1065, 1120, 2290, 2848, 8655, 8849 and 8878), the IRS has required handwritten signatures (for this purpose, scanned or digitized images of handwritten signatures are treated as electronic signatures and are not handwritten signatures) for all other IRS documents (including all returns, statements, elections or other documents made under any provision of the Code, published guidance, publications, forms or instructions).
 The forms to which the prior relief were applicable included Forms 3115, 8832, 8802, 1066, 706, 706-NA, 709, 1120-ND, 1120-RIC, 1120-C, 1120-REIT, 1120-L, 1120-PC, 1128, 3520, 3520-A, 8453 8878, 8879, 8038, 8038-G and 8038-GC.
 Control Number NHQ-10-0421-0002.
 Control Number NHQ-10-1121-0005.
 IRM 10.10.1.6.2; IRM Exhibit 10.10.1-2.