House lawmakers renew IRS push to digitize  paper returns

Congress is making another run this year at legislation aimed at more easily digitizing paper tax return forms at the IRS.

Reps. Brad Schneider, D-Ill., and Rudy Yakym, R-Ind., this week introduced the Barcode Automation for Revenue Collection to Organize Disbursement and Enhance Efficiency Act, which would require prepared tax returns to include scannable code on the paper forms. 

The bill, otherwise known as the BARCODE Efficiency Act, also calls for the IRS to use optical character recognition technology for paper documents it receives.

The legislation is a companion to a Senate effort led by Indiana Republican Todd Young and Georgia Democrat Raphael Warnock. The bipartisan duo, both members of the Senate Finance Committee, introduced their version of the bill in February 2025, but it hasn’t advanced out of the panel.

Young previously teamed with former Sen. Tom Carper, D-Del., in introducing the bill in January 2024. The lawmakers sought to use allocated Inflation Reduction Act funding to implement scannable 2D barcode technology that the IRS could easily convert to digital form.

The House bill, meanwhile, notes that the Treasury secretary can decide to not use optical character recognition technology on tax forms if they determine the tech is slower or less reliable than manually transcribing paper returns or another process the IRS is already using.

If the Treasury secretary does exercise that exception, they would be required to deliver a report to the House Ways & Means and Senate Finance committees detailing their reasoning within 30 days of the decision. 

While Congress considers the bill, the IRS has already taken similar paperless steps, with some fits and starts. According to a September 2025 report from the Treasury Inspector General for Tax Administration, the tax agency kicked off a Zero Paper Initiative aimed at an expansion of scanning and the digital processing of paper-based returns. The effort was partially intended to make up for some of the drastic DOGE cuts to the IRS. 

“However, the initiative is already delayed,” TIGTA wrote. “For example, management stated that they shipped over 800,000 returns to the contractor to be scanned in May 2025, but 600,000 returns were subsequently sent back to the IRS to be manually processed because the vendor was not able to process these returns timely.”

Though the IRS still has to deal with paper returns, it’s ditching paper in other areas of its work. An executive order issued last March, for example, directed federal agencies to shift from paper-based payments to electronic methods, requiring the Treasury Department to phase out paper check disbursements and receipts by Sept. 30, 2025. 

An October 2025 TIGTA report, meanwhile, noted that IRS leadership had launched a Technical Roadmapping Initiative that “aims to eliminate paper-based processes and focuses on making it easier to build, test, and deploy software with fewer barriers.”