Sponsors (2)
The bill speeds IRS digitization and reduces manual data-entry errors for many taxpayers and staff, but requires upfront costs and added compliance steps and creates risks of OCR errors and uneven implementation that could harm some filers.
Taxpayers and IRS staff will receive paper-filed returns and correspondence converted to electronic format faster, reducing manual processing delays and improving recordkeeping, which can speed taxpayer service and audit responses.
Taxpayers (and preparers) who print electronically prepared returns will face fewer data-entry errors because scannable codes/formats enable automated, more accurate capture of return data.
Taxpayers and federal employees will face upfront implementation and ongoing costs (software, scanners, training) and small tax preparers or taxpayers may incur added compliance steps to adopt required scannable codes or formats.
Taxpayers who submit handwritten or poorly printed forms risk processing mistakes or delays if automatic OCR/scan conversion misreads their returns or correspondence.
Taxpayers and IRS staff could experience uneven processing standards and uncertainty if Treasury grants exemptions or delays implementation, producing inconsistent treatment across filers and preparers.
Based on analysis of 2 sections of legislative text.
Requires the IRS to convert paper tax returns and correspondence into electronic form using barcode scanning and OCR, with limited exemptions and phased start dates.
Requires the IRS to convert paper tax returns and paper correspondence into electronic form using scannable barcodes, optical character recognition (OCR), and other machine-readable codes. Printed returns that were prepared electronically must include a scannable code so the IRS can use barcode scanning; OCR must be used for paper returns not prepared electronically and for paper correspondence, with limited exceptions when manual processes are faster or more reliable. Phased start dates apply: individual income returns begin after a short transition period, most other returns and correspondence follow later, and estate/gift returns have the longest delay. The Treasury Secretary (or delegate) may temporarily exempt the requirement if conversion technology proves slower or less reliable than manual processing, but any exemption cannot take effect until a report is submitted to House and Senate tax committees within 30 days.
Introduced January 7, 2026 by Brad Schneider · Last progress April 28, 2026