BARCODE Efficiency Act

Key Points

• This bill requires tax software to add a scannable barcode to tax returns that are printed out and mailed. When the IRS receives these paper forms, they would scan the code to instantly turn the information into digital data instead of typing it in by hand.
• For returns written by hand or letters sent through the mail, the IRS would be required to use digital scanning technology that can read text. This tool turns physical documents into digital files, which is much faster and more accurate than having employees type the information manually.
• The goal is to help the IRS process tax returns and respond to mail much faster. Right now, paper documents can cause major backlogs because they require a lot of manual work, which often delays tax refunds for people who do not file electronically.
• The new rules would start for individual income tax returns on January 1 of the first year that is at least six months after the bill becomes law. Other types of taxes, like those for estates or gifts, would have up to two years to switch to the new system.

Impact Analysis

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