S. 452 – BARCODE Efficiency Act

AI-Generated Summary

Updated November 24, 2025 at 2:59 AM UTC

The BARCODE Efficiency Act would make the Internal Revenue Service (IRS) use barcode scanning and optical‑character‑recognition (OCR) technology to turn paper tax returns and other paper correspondence into electronic data. It applies to returns that were prepared on a computer but printed and mailed, as well as any paper returns or letters the IRS receives.

Key Provisions

Paper copies of electronically prepared tax returns must include a scannable barcode that, when read, converts the return’s information into electronic form.
The IRS must use barcode scanning for those returns and must use OCR (or similar technology) for any paper return that wasn’t electronically prepared, for barcode‑enabled returns that can’t be read accurately, and for other paper letters it receives.
The Treasury Secretary can exempt a return or piece of correspondence from these requirements if the technology is slower or less reliable than manual transcription, but must report any exemption to the House Ways and Means Committee and Senate Finance Committee within 30 days.
The rules take effect at different times: individual returns 180 days after enactment, estate and gift returns 24 months after enactment, and all other returns or correspondence 12 months after enactment.

Legislative Activity

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1 earlier action

SenateIntro Referral Latest Action

Read twice and referred to the Committee on Finance.

Finance Committee

February 6, 2025

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SenateIntro Referral

Introduced in Senate

February 6, 2025

SenateIntro Referral

Read twice and referred to the Committee on Finance.

Finance Committee

February 6, 2025

Bill Text

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Introduced in SenateIssued February 6, 2025

II

119th CONGRESS

1st Session

S. 452

IN THE SENATE OF THE UNITED STATES

February 6 (legislative day, February 5), 2025

Mr. Young (for himself and Mr. Warnock) introduced the following bill; which was read twice and referred to the Committee on Finance

A BILL

To require electronically prepared tax returns to include scannable code when submitted on paper, and to require the use of optical character recognition technology for paper documents received by the Internal Revenue Service.

1.

Short title

This Act may be cited as the Barcode Automation for Revenue Collection to Organize Disbursement and Enhance Efficiency Act or the BARCODE Efficiency Act.

2.

Scanning and digitization of tax returns and correspondence

(a)

Returns prepared electronically and submitted on paper

With respect to any Federal tax return which is prepared electronically, but is printed and filed on paper—

(1)

such return shall bear a code which, when scanned, converts the data included in such return to electronic format, and

(2)

subject to subsection (b)(1)(B), the Internal Revenue Service shall use barcode scanning technology to convert the data included in such returns to electronic format.

(b)

Optical character recognition software

With respect to—

(1)

any Federal tax return which—

(A)

is not prepared electronically and is printed and filed on paper, or

(B)

is described in subsection (a)(1) but, for any reason, the data included in such return cannot be accurately converted into electronic format, or

(2)

any correspondence which is received by the Internal Revenue Service in a paper form (with the exception of any such correspondence which has been received by the Internal Revenue Service in electronic format),

the Internal Revenue Service shall use optical character recognition technology (or any functionally similar technology) to transcribe such return or correspondence.

(c)

Exception

(1)

In general

Subsection (a) or (b) shall not apply to the extent that the Secretary of the Treasury or the Secretary’s delegate determines that the technology described in such subsection is slower or less reliable than—

(A)

the process of manually transcribing returns or correspondence received in a paper form, or

(B)

any other process that the Internal Revenue Service is using or would otherwise use.

(2)

Report to congress

Any exception to the application of subsection (a) or (b) pursuant to paragraph (1) shall not take effect unless the Secretary provides a report to the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Senate regarding the determination made by the Secretary under such paragraph within 30 days of such determination.

(d)

Effective date

This section shall apply to—

(1)

any individual income tax return (as defined in section 6011(e)(3)(C) of the Internal Revenue Code of 1986) received on or after January 1 of the first calendar year beginning more than 180 days after the date of enactment of this Act,

(2)

any estate tax return (as described in section 6018 of such Code) or gift tax return (as described in section 6019 of such Code) received on or after January 1 of the first calendar year beginning more than 24 months after the date of enactment of this Act, and

(3)

any other return or correspondence received on or after January 1 of the first calendar year beginning more than 12 months after the date of enactment of this Act.