House passes two bills to modernize IRS operations

Less than two weeks after the IRS wrapped what its CEO called the “most successful filing season” in history, the House passed a pair of bills aimed at giving the tax agency better tech for its next go-round.

The lower chamber cleared the BARCODE Efficiency Act (H.R. 6956) and the Taxpayer Experience Improvement Act (H.R. 7971) on Monday, teeing up the modernization-focused pieces of legislation for the Senate.

The BARCODE Efficiency Act would require tax returns that are prepared electronically to include a scannable code when they are submitted on paper. The bill also calls for the use of optical character recognition technology when the IRS receives paper documents. 

Rep. Brad Schneider, D-Ill., said on the House floor Monday that millions of Americans still use paper returns. Processing those returns currently requires IRS employees to manually transcribe the data into agency systems, line by line. 

“The process is not only time-consuming; it’s costly and often inaccurate,” said Schneider, who co-sponsored the bill. “Processing delays translate directly into refund delays, needlessly causing financial hardship for taxpayers with limited savings or on fixed incomes.”

Rep. Rudy Yakym, R-Ind., the bill’s other co-sponsor, said that if someone at the tax agency simply transposes a number from a paper return, then “all of a sudden you’ve got an inaccurate return.” The consequences can spiral out of control from there.

“The IRS can later come after you for an audit, or you may have substantial delays in receiving your refund because of the amount of time it takes to manually key in all that data,” Yakym said. “It’s just simply a waste of time and a waste of resources. There’s better ways of handling that, and frankly, I think it’s time for the IRS to come into the 21st century.”

Scanning technology has been recommended by the Government Accountability Office and the National Taxpayer Advocate, Yakym noted. And the BARCODE Efficiency Act is supported by the National Taxpayers Union and the American Coalition for Taxpayer Rights, among other groups, according to Schneider.

“Anything we can do to make this process more efficient and user-friendly for the American taxpayer is well worth our time,” said Rep. Jason Smith, R-Mo., chair of the House Ways and Means Committee. “And if we are reforming our tax code to provide more relief to working families, we should be modernizing our tax agency to get that relief to them as soon as possible.”

A companion bill from Sens. Todd Young, R-Ind., and Raphael Warnock, D-Ga., was introduced in the upper chamber in February 2025, but hasn’t advanced out of committee. Young and then-Sen. Tom Carper, D-Del., had previously made a run at the bill in January 2024.

The Taxpayer Experience Improvement Act, meanwhile, would provide more transparency into IRS operations through the creation of a real-time dashboard that informs taxpayers about backlogs, wait times and more.

“That dashboard means you don’t have to be picking up the phone and calling the IRS,” said Rep. David Schweikert, R-Ariz., chairman of the House Ways and Means Oversight Subcommittee and a co-sponsor of the bill. “You don’t have to be sitting there on hold for hours.”

Rep. Don Beyer, D-Va., who serves on the House Ways and Means tax and trade subcommittees and also co-sponsored the bill, credited the Biden administration’s Inflation Reduction Act for improving customer service for taxpayers after “decades of underinvestment” in the IRS. 

But although the most recent filing season appeared “relatively smooth,” there’s room for improvement — especially after what the Virginia Democrat said were “ill-advised staffing and funding cuts” by the Trump administration. 

“The revisions in this bill aim to reduce the long-term demands on the agency by increasing the level of information available to taxpayers online and facilitating plans to digitize tax returns and correspondence,” Beyer said. “It would also require the IRS to provide personalized electronic updates to taxpayers regarding the status of their returns and refunds, which should reduce the agency’s incoming call volume.” 

The legislation, which does not have a Senate counterpart, would also push the IRS to implement customer callback technology. The dashboard would post call volumes and promote the availability of the callback service. 

Frank Bisignano, the aforementioned IRS CEO who touted the greatest filing season in history during an appearance before the Senate Finance Committee earlier this month, has frequently touted the agency’s investments in technology. He’s said on many occasions that those investments have made up for staff cuts and led to more revenue and enforcement actions — though those claims have lacked detail and drawn pushback from sources and from the data itself.

“It is disappointing, though, sadly, not surprising, that we have to legislate to modernize an agency like the IRS so that its operations are more user-friendly to the American taxpayer, but that’s the reality that we’re facing,” Smith said. “The Taxpayer Experience Improvement Act pushes the IRS to be an agency more worthy of the taxpayers it serves and more responsive to their needs.”