Remember back in the day when we would all gather for a transaction closing to get documents signed and enjoy a nice meal out at a restaurant together? Me neither. In fact, in-person closings were starting to fade long before the pandemic.
Now that we have been closing transactions from the comfort [sic] of our homes for almost a year, in-person closings may become extinct altogether. With that comes the complicated logistics of getting documents signed, shipped, and overnighted to the respective parties where electronic signatures cannot, for one reason or another, be used. Electronic signatures have saved transaction closings during the pandemic, but specific IRS forms, such as the family of Form 8038s, still required a wet signature.
Good news; on December 28, 2020, the IRS published a memorandum, which allows taxpayers and representatives to use electronic or digital signatures when signing over roughly 20 forms, including Forms 8038, 8038-G and 8038-GC. Notably, Forms 8038-T and 8038-CP were excluded from the IRS memo. The IRS guidance is effective for Forms 8038, 8038-G and 8038-GC that are postmarked from January 1, 2021 through June 30, 2021.
Even before the pandemic, facsimile signatures of the paid preparer (e.g. counsel to the Issuer) have been expressly acceptable for Form 8038-G, but not so for the others.
You can see the difference for yourself…
Makes perfect sense, right?
NABL has also requested permanent, long-term clarification from the IRS regarding electronic signatures. In September, NABL sent a letter to the IRS requesting a laundry list of items pertaining to the instructions to Forms 8038 and 8038-G. Electronic signatures for Form 8038 was one of the items.