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IRSAC Recommends Electronic Signatures for 8850

The Internal Revenue Service Advisory Council (IRSAC) issued its annual report today in Washington, DC. As described in the report, the IRSAC

serves as an advisory body to the Commissioner of Internal Revenue. The purpose of the IRSAC is to provide an organized public forum for Internal Revenue Service (the “IRS”) officials and representatives of the public to discuss relevant tax administration issues. The IRSAC reviews existing tax policy and recommends policies regarding both existing and emerging tax administration issues.

The report covers a variety of topics (157 pages in total), including the WOTC program. What they recommend is an extremely sensible solution to a highly problematic inefficiency:

After the release of IRS Announcement 2002-44, many employers automated their job application process in anticipation that state workforce agencies would allow electronic submission of Form 8850. Unfortunately, most state workforce agencies do not accept electronically-submitted Form 8850s and those that do expect employers to retain originally-signed forms. Obtaining originally-signed Form 8850s imposes a significant administrative burden on employers and prevents employers from taking full advantage of the Work Opportunity Tax Credit. To alleviate this administrative burden, IRSAC recommends that the Commissioner of the IRS take prompt action to ensure that the Secretary of Labor, or the Secretary’s appropriate designee, issue guidance mandating that state workforce agencies treat hard copies of electronically-signed Form 8850s as if they were originally-signed Form 8850s.

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