Who can sign a tax return for a corporation?
This question often comes up during tax season. Common sense dictates that the officers that initiated incorporation should be able to sign tax forms. In most medium-sized and large organizations, all financial activities are handled by the treasurer or chief financial officer. This task in small organizations is sometimes handled by the president, vice president or other designated person in the organization. It is important to note that the person must be authorized to sign important documents.
You can’t have someone who isn’t authorized sign important documents such as a tax return. The reasons are quite simple. The IRS holds your organization responsible for accurate accounting of your organizations’ assets and liabilities. An authorized individual should have that information readily available. An unauthorized person may cause difficulties when it comes to accountability. You want to make sure your organization is viable in the eyes of your customers and clients.
Corporations file Form 1120 or Form 1120S annually. Authorized signers include the president, vice president, treasurer, assistant treasurer, and other authorized officers. For this reason alone, all officers should have documentation designating their authorization. This authorization can come in the form of a contract that states what authority the person has.
There are certain circumstances where an officer of a corporation shouldn’t sign. It is understood that one of those circumstances is when the corporation merges with another corporation. In that case the new corporation files and signs the tax return. Bankruptcy is another circumstance where an officer shouldn’t sign. The receiver or trustee is obligated to file and sign those tax forms. When a corporation has a Paid Preparer file the tax return, then they are not obligated to sign it.
It is important to understand that your corporation is still liable for accurate reporting even when you hire outside tax help. Tax Preparers depend on the data you provide. If in doubt about how accurate your data is, authorized individuals should have that information.