Sponsors (2)
The bill modernizes IRS processing by converting paper returns to electronic records—speeding processing, improving recordkeeping, and enabling oversight—while introducing risks of OCR errors, upfront implementation costs, and some new compliance burdens for taxpayers.
Taxpayers will have paper returns converted into electronic records, which speeds processing and can reduce refund delays and lost mail problems.
IRS federal employees will spend less time on manual data entry, allowing faster refunds and freeing staff to focus on audits and taxpayer services that benefit taxpayers.
Taxpayers and IRS staff will get clearer electronic records and audit trails for returns and correspondence, improving recordkeeping and reducing errors from lost mail.
Taxpayers and IRS staff could experience incorrect processing if OCR or barcode scanning misreads paper submissions, causing errors, delays, and manual corrections.
Taxpayers may face additional direct costs or burdens if they must obtain scannable codes or updated software from preparers to meet electronic-scannability requirements.
The IRS will likely need up-front investment in scanning, OCR infrastructure, and staff training, producing short-term costs that are ultimately borne by taxpayers.
Based on analysis of 2 sections of legislative text.
Requires the IRS to convert paper tax returns and correspondence into electronic data using barcodes and OCR, with phased start dates and limited exemptions.
Requires the IRS to convert paper tax returns and paper correspondence into electronic data by using barcodes and optical character recognition (OCR), with limited exceptions. Returns that were prepared electronically but printed and mailed must include a scannable code so the IRS can capture their data by barcode scanning; OCR is required for paper-filed returns that lack scannable codes, for returns whose barcode data can’t be read accurately, and for paper correspondence. Implementation is phased by return type (individual returns earliest), and the Treasury Secretary may grant exemptions when scanning/OCR is slower or less reliable than manual methods, but any exemption must be reported to tax-writing committees within 30 days before taking effect.
Introduced January 7, 2026 by Brad Schneider · Last progress April 28, 2026