BARCODE Efficiency Act
BARCODE Efficiency Act
Plain Language Summary
# BARCODE Efficiency Act Summary **What the bill would do:** The BARCODE Efficiency Act would require the IRS to modernize how it processes tax returns by using barcode scanning and optical character recognition technology. Specifically, it would mandate that electronically-prepared tax returns printed and filed on paper include scannable barcodes, which the IRS would then scan to convert data into digital format. For handwritten or non-electronic paper returns, the IRS would use optical character recognition technology (similar to what reads handwriting digitally) to transcribe the information. The IRS could skip these requirements only if the technology would be slower or less reliable than existing processes. **Who it affects and why it matters:** This bill primarily affects taxpayers who file paper returns and the IRS itself.
Supporters argue it would speed up tax processing, reduce errors, and save the IRS time and money by automating data entry currently done by hand. It could also reduce backlogs in tax return processing, which has been a significant problem at the IRS in recent years. **Current status:** The bill is currently in committee and has not yet advanced for a full vote in the House. As a technical modernization measure with bipartisan appeal, it has potential to move forward, though no timeline has been set.
CRS Official Summary
Barcode Automation for Revenue Collection to Organize Disbursement and Enhance Efficiency Act or the BARCODE Efficiency ActThis 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.
Latest Action
Placed on the Union Calendar, Calendar No. 434.