The National Tax Advocate Service (NTA) is formally directing the IRS to implement scanning technology to speed up the process of filing paper returns. The NTA stated that the tech they want to be implemented is has existed for a long time now, and the filing process of paper returns has continued to be a weakness the past several filing seasons. Erin Collins who is a representative of the NTA said in a statement that “Paper is the IRS’s Kryptonite” and that the IRS is currently “Buried in Paper”.
Paper Problem
There is also evidence that this paper problem is not becoming any better. Since March of this year, there is a total of 15 million paper returns that are currently unprocessed. The backlog consists of individual income tax returns, amended individual tax returns, along with original and amended business tax returns. Processing delays for these backlogged returns are projected to be at least 10 months. The NTA is confident that the IRS has done nothing to improve this situation over the past year.
The IRS previously mentioned in a statement that a goal of theirs is to eliminate the backlog before the end of 2022. NTA Representative Erin Collins believes that if scanning was implemented, the backlog may not even exist any longer. She also believes that the implementation of scanning technology will eliminate the error-prone software that the IRS currently uses. According to the NTA, approximately 22% of transcribed returns had a data transcription error last tax season. This is because IRS employees have to manually type the contents of a return into a computer, which leaves much more room for error as opposed to automation.
Barcoding Technology
Several solutions have been recommended to the IRS regarding how they could best put this scanning technology to use. 2-D barcoding is one of those methods that was suggested by Erin Collins of the NTA. Just as a retail employee can scan a product to bring up relevant details, barcodes can also be replaced on tax returns. This would allow IRS employees to scan the barcode of the return to see the necessary information to process returns. This can save a significant amount of time because it would put all information in one place for IRS Processors.
Wrap Up
As of now, this scanning technology that is being advocated for has not been implemented. As the backlog continues to grow and technology continues to improve, we hope that the IRS will become more aware of the resources that are available to them. Filing paperless returns is the best way to prevent your return from becoming a victim of the backlog.