Rev. Rul. 78-370

Advice has been requested whether the requirement in section 1.6695-1(b)(1) of the Income Tax Regulations, that an income tax return preparer manually sign the return is satisfied if a preparer signs a completed income tax return form, makes a photocopy of the signed return form, and has the taxpayer sign and file the photocopy.

Section 6695(b) of the Internal Revenue Code of 1954 imposes a 25 dollar penalty on any person who is an income tax return preparer with respect to any return, who is required to sign such return, and who fails to sign such return, unless such failure is due to reasonable cause and not due to willful neglect.

Section 1.6695-1(b)(1) of the regulations requires an individual who is an income tax return preparer with respect to a return to manually sign the return (which may be a photocopy) after it is completed and before it is presented to the taxpayer for signature.

Section 1.6695-1(b)(4)(i) of the regulations provides that the manual signature requirement in section 1.6695-1(b)(1) may be satisfied by a photocopy of a copy of the return which copy is manually signed by the preparer after completion of its preparation.

The term copy of the return referred to in section 1.6695-1(b)(4)(i) of the regulations includes an original income tax return form completed and retained by the preparer. The preparer after manually signing such a form, may photocopy it and present the photocopy to the taxpayer under section 1.6695-1(b)(4)(i) to be filed as its return. A photocopied form so filed, bearing a photocopy of the preparer's manual signature and the manual signature of the taxpayer, will be considered the taxpayer's return and will satisfy the manual signature requirement. The original form retained by the preparer would be a copy of the taxpayer's return.

Accordingly, the requirement in section 1.6695-1(b)(1) of the regulations that an income tax return preparer manually sign the return is satisfied if the preparer signs a completed income tax return form, makes a photocopy of the return form, and has the taxpayer sign and file the photocopy. The manually signed copy of the return form must be retained by the preparer and kept available for inspection for the 3 year period following the end of the return period in accordance with section 1.6695-1(b)(4)(iv) of the regulations.