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AI Summary This summary was generated by AI from the bill text. AI can get information wrong.
This bill would help the IRS turn paper tax forms and letters into digital data more quickly. If a tax return was originally prepared electronically but then printed and mailed on paper, it would have to include a scannable code so the IRS can read it electronically. For other paper tax returns and paper correspondence, the IRS would be required to use optical character recognition, or similar technology, to convert the information into digital form. The bill also allows the IRS to skip these tools if they are slower or less reliable than manual processing, but the agency would have to explain that decision to Congress.
- Electronic returns filed on paper must include a code that can be scanned to turn the form into electronic data.
- The IRS would need to use barcode scanning for those forms and optical character recognition for other paper returns and paper correspondence.
- An exception is allowed if the technology is worse than manually entering the information or using another IRS process.
- If the IRS makes that exception, it must send a report to the House Ways and Means Committee and the Senate Finance Committee within 30 days.
- The new rules would begin at different times: individual income tax returns after about 6 months, estate and gift tax returns after about 2 years, and most other paper returns or correspondence after about 1 year.
Official Summaries
Barcode Automation for Revenue Collection to Organize Disbursement and Enhance Efficiency Act or the BARCODE Efficiency Act
This bill requires the Internal Revenue Service (IRS) to use barcodes, barcode scanning technology, and optical character recognition (or similar) technology to digitize certain federal tax return information and correspondence, unless the technology is slower or less reliable than other IRS processes (subject to conditions).
Specifically, the bill requires a scannable barcode on electronically-prepared federal tax returns that are printed and filed in paper format with the IRS. The bill also requires the IRS to use barcode scanning technology to convert data included on such returns into an electronic format.
Further, the bill requires the IRS to use optical character recognition (or similar) technology to transcribe federal tax returns and correspondence received by the IRS that are not prepared electronically and are received in paper format.
However, under the bill, the use of barcodes, barcode scanning technology, and optical character recognition (or similar) technology is not required if (1) such technology is slower or less reliable than manual transcription or any other IRS process, and (2) the IRS provides a report to Congress regarding the determination to not use such technology.
Current Full Text
[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 452 Introduced in Senate (IS)]
<DOC>
119th CONGRESS
1st Session
S. 452
To require electronically prepared tax returns to include scannable
code when submitted on paper, and to require the use of optical
character recognition technology for paper documents received by the
Internal Revenue Service.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
February 6 (legislative day, February 5), 2025
Mr. Young (for himself and Mr. Warnock) introduced the following bill;
which was read twice and referred to the Committee on Finance
_______________________________________________________________________
A BILL
To require electronically prepared tax returns to include scannable
code when submitted on paper, and to require the use of optical
character recognition technology for paper documents received by the
Internal Revenue Service.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Barcode Automation for Revenue
Collection to Organize Disbursement and Enhance Efficiency Act'' or the
``BARCODE Efficiency Act''.
SEC. 2. SCANNING AND DIGITIZATION OF TAX RETURNS AND CORRESPONDENCE.
(a) Returns Prepared Electronically and Submitted on Paper.--With
respect to any Federal tax return which is prepared electronically, but
is printed and filed on paper--
(1) such return shall bear a code which, when scanned,
converts the data included in such return to electronic format,
and
(2) subject to subsection (b)(1)(B), the Internal Revenue
Service shall use barcode scanning technology to convert the
data included in such returns to electronic format.
(b) Optical Character Recognition Software.--With respect to--
(1) any Federal tax return which--
(A) is not prepared electronically and is printed
and filed on paper, or
(B) is described in subsection (a)(1) but, for any
reason, the data included in such return cannot be
accurately converted into electronic format, or
(2) any correspondence which is received by the Internal
Revenue Service in a paper form (with the exception of any such
correspondence which has been received by the Internal Revenue
Service in electronic format),
the Internal Revenue Service shall use optical character recognition
technology (or any functionally similar technology) to transcribe such
return or correspondence.
(c) Exception.--
(1) In general.--Subsection (a) or (b) shall not apply to
the extent that the Secretary of the Treasury or the
Secretary's delegate determines that the technology described
in such subsection is slower or less reliable than--
(A) the process of manually transcribing returns or
correspondence received in a paper form, or
(B) any other process that the Internal Revenue
Service is using or would otherwise use.
(2) Report to congress.--Any exception to the application
of subsection (a) or (b) pursuant to paragraph (1) shall not
take effect unless the Secretary provides a report to the
Committee on Ways and Means of the House of Representatives and
the Committee on Finance of the Senate regarding the
determination made by the Secretary under such paragraph within
30 days of such determination.
(d) Effective Date.--This section shall apply to--
(1) any individual income tax return (as defined in section
6011(e)(3)(C) of the Internal Revenue Code of 1986) received on
or after January 1 of the first calendar year beginning more
than 180 days after the date of enactment of this Act,
(2) any estate tax return (as described in section 6018 of
such Code) or gift tax return (as described in section 6019 of
such Code) received on or after January 1 of the first calendar
year beginning more than 24 months after the date of enactment
of this Act, and
(3) any other return or correspondence received on or after
January 1 of the first calendar year beginning more than 12
months after the date of enactment of this Act.
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