Knowing When a ‘Wet Signature’ Is Needed on Corporate Tax FormsMarch 14, 2023 – Article
Zack Nolan, Sally James, and Michael Wiener published the article "Knowing When a ‘Wet Signature’ Is Needed on Corporate Tax Forms" to Bloomberg Tax.
The question of whether the federal government requires a “wet signature” when submitting an Election by a Small Business Corporation (S election) or a Qualified Subchapter S Subsidiary Election (QSub election) has confused taxpayers and tax practitioners alike—with good reason.
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.
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 regulations are silent on this issue.
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