Tax firms can collect engagement letters, consent forms and Form 8879 signatures electronically, but Form 8879 comes with rules. IRS Publication 1345 expects identity verification and a recorded audit trail for an electronic signature on it. XyloDocs e-signatures cost $1 each, and new firms get 100 free in their first 12 months.
Last verified: October 9, 2026. Primary sources: IRS Publication 1345 (Rev. 12-2025), Form 8879 and its instructions (Rev. January 2021), the IRS page About Form 8879 (reviewed March 30, 2026), and the ESIGN Act, 15 U.S.C. 7001.
What tax firms sign electronically
Three kinds of document cover the usual cases, and only one of them is governed by IRS signature rules.
| Document | Which rules apply | Practical note |
|---|---|---|
| Engagement letter | Ordinary e-signature law. Publication 1345's e-signature rules are written for Forms 8878 and 8879, not for your contract with the client. | Send it at intake, before any work starts, and keep the signed copy in the client's record. Add a checkbox for consent to text and WhatsApp messages. |
| Consent forms, such as Section 7216 consents | The consent has its own content rules. See our guide to Section 7216. | Signing is the easy part. The wording of the consent is what needs care. |
| Form 8879 (and Form 8878 for extensions) | IRS Publication 1345 and the form instructions. | Needed whenever the ERO enters or generates the taxpayer's PIN, and always under the Practitioner PIN method. The ERO must have the signed form before transmitting the return. |
For the engagement letter, federal law is on your side. The ESIGN Act says a signature or contract may not be denied legal effect, validity or enforceability solely because it is in electronic form. State law and your professional rules can add requirements, so have your attorney or state board confirm your process. For the broader Form 8879 rules, read our guide to Form 8879 and e-signature rules.
What Publication 1345 requires for an electronic signature on Form 8879
Publication 1345 (Rev. 12-2025, page 15) says taxpayers can sign Forms 8878 and 8879 electronically if the software provides the capability, and that the software and the ERO must then meet identity verification requirements. No specific technology is required. Acceptable examples include a signature pad, a stylus on a display, a digitized image of a handwritten signature, a typed name, a shared secret such as a PIN, and a digital signature.
| Requirement | What the IRS says | Where |
|---|---|---|
| Data the software must record | A digital image of the signed form; the date and time of the signature; the taxpayer's IP address and login username (remote transactions only); the passed results of knowledge-based authentication and, for in-person signing, confirmation that a government photo ID was checked; and the method used to sign, or a system log or audit trail showing the signing was completed. The ERO must give this information to the IRS on request. | Pub. 1345, p. 16 |
| Identity, in person | The ERO inspects a valid government photo ID, compares it to the taxpayer, and records the name, Social Security number, address and date of birth. A record check is optional. The ERO must confirm identity unless there is a multi-year business relationship, meaning the ERO originated a prior-year return for the taxpayer and identified them this way. | Pub. 1345, p. 16 |
| Identity, remote | The ERO records the name, Social Security number, address and date of birth, and verifies them through record checks with an agency, credit bureaus or similar databases. Verification must meet NIST Special Publication 800-63 Level 2 and knowledge-based authentication, or a higher assurance level. | Pub. 1345, pp. 16 and 17 |
| Joint returns | The process must separately identify and authenticate each taxpayer. | Pub. 1345, p. 16 |
| Failed authentication | After three failed attempts at the knowledge-based questions, the ERO must obtain a handwritten signature. | Pub. 1345, p. 17 |
| Signed record | The signature must be linked to its record, and the record must be tamper-proof once signed. Storage needs secure access control, an index, and the ability to produce legible hard copies. | Pub. 1345, p. 17 |
| Retention | Keep Form 8879 for three years from the return due date or the IRS received date, whichever is later. Do not send it to the IRS unless the IRS asks. | Pub. 1345, pp. 15 and 18; Form 8879 instructions |
The Form 8879 instructions add that the ERO must receive the signed form before the return is transmitted, and that the ERO must confirm the taxpayer's identity. The taxpayer must sign before the ERO originates the submission (Publication 1345, p. 15).
Two ways to get a signed Form 8879
Form 8879 can be signed by hand or electronically, and the two routes carry different burdens.
- Handwritten signature, returned by any listed route. The form instructions allow the taxpayer to return the signed form to the ERO by hand delivery, U.S. mail, private delivery service, email, an Internet website or fax. Publication 1345 says a handwritten signature sent that way is not an electronic signature via remote transaction, so the identity and recording rules in the table are written for the electronic route. A client who prints, signs, scans and uploads the form is using the handwritten route.
- Electronic signature in software that supports it. This route needs the identity verification and the recorded data in the table. Your tax software may already offer it. Check what it records before you rely on it.
Either way, the ERO still has to confirm the taxpayer's identity, the signature has to arrive before the return is transmitted, and the signed form is not sent to the IRS with the return.
Test any e-signature tool before tax season
A secure signing page does not by itself satisfy Publication 1345. Whether a tool works for Form 8879 depends on what it records and how it verifies identity, not on its brand. Put these questions to any vendor, including us.
- Does it store an image of the signed form, with the date and time of signing?
- For remote signing, does it capture the signer's IP address and login?
- Does it run knowledge-based authentication, and does it keep the passed result?
- Does it identify and authenticate each spouse separately?
- What happens after three failed attempts? Can you switch that client to a handwritten signature?
- Is the signed record locked against changes, and can you export a legible copy and the audit trail for the IRS?
What XyloDocs e-signatures cost
In XyloDocs you upload a document, add signature fields, send it to the client, track its status and keep the signed copy in the client's record. Requests can reach clients by text, WhatsApp, email or the client portal. The features page describes the tool, and the Form 8879 questions above apply to it like any other.
E-signatures are $1 each, drawn from a prepaid balance with a $50 minimum. As an onboarding offer, new firms receive 100 free e-signatures in their first 12 months. After that, each one is $1. Count signatures, not clients: a single filer who signs two documents is two signatures. If 150 single filers each sign two documents, that is 300 signatures. In the first 12 months the first 100 are free and the other 200 cost $200. The same volume in a later year costs $300. The pricing page lists every metered rate.
Signed forms such as Form 8879 hold Social Security numbers and signatures, so it matters who reads them. Your clients' documents are read by private AI that runs on XyloDocs's own servers or on hardware in your own office. They are never sent to an outside AI company, never sold, and never used to train AI models. Running it on your own hardware is the setup we prefer. The security page has the details.
Try it
Trial seats are open for new firms: practice returns submitted to the IRS's Assurance Testing System (ATS) before the 2027 season. No real client returns are filed during the trial. To see how engagement letters and signature requests would work for your clients, Request a trial seat and tell us which documents you sign most often.
Frequently asked questions
Can a client sign Form 8879 electronically?
Yes, if the signing happens in software that provides electronic signature capability and meets the identity verification and recording requirements in Publication 1345. A client can also sign by hand and return the form by hand, mail, private delivery service, email, a website or fax. Either way, the ERO needs the signed form before transmitting the return.
How long do I keep a signed Form 8879?
The Form 8879 instructions and Publication 1345 say three years from the return due date or the date the IRS received the return, whichever is later. The form may be kept electronically, and you do not send it to the IRS unless the IRS asks. Keep the signature record that Publication 1345 lists alongside it, because the ERO must provide that information to the IRS on request.
Are electronic signatures valid on engagement letters?
Generally, yes. The federal ESIGN Act says a signature or contract may not be denied legal effect, validity or enforceability solely because it is electronic. State law and your professional rules can add requirements, so have your attorney or state board confirm your engagement letter process before you make it paperless.
How much do e-signatures cost on XyloDocs?
Each e-signature is $1, drawn from a prepaid balance with a $50 minimum. New firms get 100 free e-signatures in their first 12 months, then pay $1 each. At that rate, 300 signatures cost $300, or $200 in a first year after the free 100. The $49 monthly platform base is separate from usage.
Does a client have to sign again if the return changes?
Sometimes. Publication 1345 requires a new declaration if the return data changes after the taxpayer signs and the amounts differ by more than $50 in total income or AGI, or by more than $14 in total tax, federal income tax withheld, refund or amount owed. Check the figures on the signed form against the final return before transmitting.