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Congress·In Committee·about 1 year ago

Congress pushes barcode scanning and text-reading tech to speed up mailed-in tax returns

Also known as: BARCODE Efficiency Act

Legislative Progress

Filed
Review
Senate
House
President

Impacts

Mixed Impacts(3)
Small Business Owner
Neutral
Gig Worker
Neutral
Federal Employee
Neutral

Key Points

  • If you print a tax return that was made on a computer and mail it in, it would need a scannable barcode so the tax agency can upload it faster.
  • For paper returns that don’t have a barcode (or don’t scan right), the tax agency would use “read-the-text” scanning software to turn the paper into digital data.
  • This is meant to speed up processing of mailed-in taxes and paper letters, which could mean faster refunds and fewer backlogs during busy tax season.
  • There’s a safety valve: if the Treasury Department says the tech is slower or less reliable than current methods, they can pause it, but they must report to Congress within 30 days.
  • The timeline depends on the type of tax form: most paper items start about 12 months after it becomes law; individual income taxes start after at least 180 days; estate and gift taxes get up to 24 months.
TaxesTechnologyInfrastructure

Milestones

2 milestones2 actions
Feb 6, 2025Senate

Read twice and referred to the Committee on Finance.

Feb 6, 2025

Introduced in Senate

What Happens Next

Projected impacts based on AI analysis

Begins Jan 1 of the first calendar year that starts more than 180 days after the Act is enacted.

IRS starts using barcode scanning for electronically prepared returns that are printed and mailed (individual income tax returns).

If you print-and-mail a return created with tax software, you should see a scannable code on the return and the IRS should be able to load your numbers faster.

Begins Jan 1 of the first calendar year that starts more than 12 months after the Act is enacted (unless covered earlier by the individual return start date).

IRS starts using OCR to transcribe other paper returns and most paper mail/correspondence.

If you mail letters or paper documents to the IRS, the IRS is more likely to scan and “computer-read” them into your case file instead of relying on manual typing.

Begins Jan 1 of the first calendar year that starts more than 24 months after the Act is enacted.

IRS starts applying the scanning/digitization requirements to estate and gift tax returns.

Families and executors handling estate tax filings, and people filing gift tax forms, may see faster intake of mailed filings and fewer delays from manual data entry.

Any time after enactment if Treasury makes a formal determination.

Treasury may pause parts of the scanning/OCR requirement if it proves slower or less reliable, and must report to Congress within 30 days.

If scanning causes delays or errors, the government can switch back (or use another method), but it has to explain the reason to Congress, which adds accountability.

Related News

2 articles

Source Information

Document Type

Congressional Bill

Official Title

BARCODE Efficiency Act

Bill NumberS 452
Congress119th Congress
ChamberSenate
Latest ActionRead twice and referred to the Committee on Finance.

Sponsor

Cosponsors

(1)
D: 1

Analysis generated by AI. While we strive for accuracy, this should not be considered legal or professional advice. Always verify information with official government sources.