Can I ask my contractor employees to submit W9s signed electronically?
I started a venture last year, and now for the first time I'm having to deal with taxes related to the startup. As my tax accountant informed me, I need to send those who made over $600 W9 forms (request for personal information and identification). Most of them can fill out the PDF form inside Adobe Acrobat and digitally sign but can't sign using their actual signature without printing and scanning.
My question is: is it OK to have them digitally sign it instead? As far as I understand, W9s are for my record, but what happens if IRS does an audit? Will they be OK with a digital signature?t
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Why not just have them sign and scan? – Russell Steen 14 years ago
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I'd ask your tax accountant his opinion. Or, better yet, ask a tax lawyer. – Jeff Siver 14 years ago
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Some of them don't have scanners. And in general, I'd just like to know this. – Artem Russakovskii 14 years ago
2 Answers
http://www.irs.gov/instructions/iw9/ar02.html Electronic system. Generally, the electronic system must:
Ensure the information received is the information sent, and document all occasions of user access that result in the submission;
Make reasonably certain that the person accessing the system and submitting the form is the person identified on Form W-9, the investment advisor, or the introducing broker;
Provide the same information as the paper Form W-9;
Be able to supply a hard copy of the electronic Form W-9 if the Internal Revenue Service requests it; and
Require as the final entry in the submission an electronic signature by the payee whose name is on
Form W-9 that authenticates and verifies the submission. The electronic signature must be under penalties of perjury and the perjury statement must contain the language of the paper Form W-9.
We use EchoSign for this process. If complies with Russell's answer on IRS requirements.
