• Home
  • Latest
  • Fortune 500
  • Finance
  • Tech
  • Leadership
  • Lifestyle
  • Rankings
  • Multimedia

Trendingnow

1

Microsoft AI chief gives it 18 months—for all white-collar work to be automated by AI

2

Former top Russian official admits the country is over Putin and can 'imagine a future without him' — even elites bail as Kremlin seizes their assets 

3

The Bezos family just donated $100 million to help achieve one of Mayor Zohran Mamdani’s top campaign promises

1

Microsoft AI chief gives it 18 months—for all white-collar work to be automated by AI

2

Former top Russian official admits the country is over Putin and can 'imagine a future without him' — even elites bail as Kremlin seizes their assets 

3

The Bezos family just donated $100 million to help achieve one of Mayor Zohran Mamdani’s top campaign promises
Finance

The IRS literally doesn’t use scanners. It also has a backlog of 15 million paper tax returns

By
Andrew Marquardt
Andrew Marquardt
Down Arrow Button Icon
By
Andrew Marquardt
Andrew Marquardt
Down Arrow Button Icon
April 1, 2022, 2:23 PM ET

If you filed your tax returns via paper this year, you might be waiting a while for a refund. 

That’s because the IRS still processes paper tax returns manually and doesn’t use basic scanning technology, according to national taxpayer advocate Erin M. Collins, head of the Taxpayer Advocate Service, an independent organization within the IRS that advocates on behalf of taxpayers. 

In her most recent blog post, Collins called the system archaic and advocated for the IRS to update its technology.

“The IRS’s submission processing function today evokes images of what data transcription looked like in the 1960s—prior to the Information Age,” Collins wrote. “In the year 2022, this doesn’t just seem crazy. It is crazy.”

It gets worse: As of March 18, the IRS currently has a backlog of 15 million paper tax returns for the 2022 tax season, according to Collins. All of which, we know now, must be done manually, with workers typing out each digit and each letter.   

Last year, the IRS received nearly 168 million tax returns in total, including roughly 17 million paper 1040 forms and over 4 million 1040-X forms, which account for individual returns. The agency also receives millions of paper business tax returns, according to the blog post.   

In a statement to Fortune, the IRS said it has been reviewing bar code scanning and other viable options with tax industry partners. 

“IRS technology needs, along with other core operations across the agency, have been underfunded for years,” the agency wrote. “The IRS wants to help taxpayers, and improving technology is a key aspect of that along with consistent, sustained funding increases for the agency.”

There are two leading types of scanning technology currently available that could work with paper tax returns: 2D barcoding and OCR, or optical character recognition, which recognizes text from a digital image, according to Collins.  

A former national taxpayer advocate, Nina E. Olson, formally recommended that the IRS adopt the 2D barcoding method in 2004. That was 18 years ago. 

“During the past two decades…the IRS has considered, rejected, proposed, reconsidered, partially implemented, and deferred the question of whether to implement scanning technology,” Collins wrote.

Although the federal government does not use basic scanning technology, states do. More than a third of U.S. states have been using the technology for returns since 2002. In the states where the method had been applied, the barcoding technology provides near 100% accuracy, according to Collins.

Processing paper returns are only one problem for the IRS this year, which has suffered more than its fair share.  

On Jan. 24, the agency warned the 2022 tax season would be a mess. Aside from the scanning issue that Collins flagged, delays in the last two years have also been exacerbated by the COVID-19 pandemic, which caused staffing shortages. 

Earlier this year, Senate Finance Committee Chairman Ron Wyden said Congress was considering how to make the filing season easier, including looking at ways to grant the IRS more money to fund taxpayer services. As of April 1, however, that hasn’t happened. 

On March 29, a day before publishing her blog post, Collins issued a directive to the IRS instructing the bureau “to work with the tax software industry to implement 2D barcoding for next filing season.”

“If necessity can be the mother of invention, the unprecedented paper returns backlog resulting from the COVID-19 pandemic should spur the IRS to take immediate steps to automate the processing of paper tax returns,” Collins wrote. “The timely payment of tax refunds for millions of taxpayers is depending on it.”

Never miss a story: Follow your favorite topics and authors to get a personalized email with the journalism that matters most to you.
About the Author
By Andrew Marquardt
See full bioRight Arrow Button Icon

Latest in Finance

Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025

Most Popular

Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Fortune Secondary Logo
Rankings
  • 100 Best Companies
  • Fortune 500
  • Global 500
  • Fortune 500 Europe
  • Most Powerful Women
  • World's Most Admired Companies
  • See All Rankings
  • Lists Calendar
Sections
  • Finance
  • Fortune Crypto
  • Features
  • Leadership
  • Health
  • Commentary
  • Success
  • Retail
  • Mpw
  • Tech
  • Lifestyle
  • CEO Initiative
  • Asia
  • Politics
  • Conferences
  • Europe
  • Newsletters
  • Personal Finance
  • Environment
  • Magazine
  • Education
Customer Support
  • Frequently Asked Questions
  • Customer Service Portal
  • Privacy Policy
  • Terms Of Use
  • Single Issues For Purchase
  • International Print
Commercial Services
  • Advertising
  • Fortune Brand Studio
  • Fortune Analytics
  • Fortune Conferences
  • Business Development
  • Group Subscriptions
About Us
  • About Us
  • Press Center
  • Work At Fortune
  • Terms And Conditions
  • Site Map
  • About Us
  • Press Center
  • Work At Fortune
  • Terms And Conditions
  • Site Map
  • Facebook icon
  • Twitter icon
  • LinkedIn icon
  • Instagram icon
  • Pinterest icon

Latest in Finance

Drone strike sparks fire at UAE nuclear power plant, the first time it’s been attacked since the Iran war started
EnergyNuclear Energy
Drone strike sparks fire at UAE nuclear power plant, the first time it’s been attacked since the Iran war started
By Jon Gambrell, Samy Magdy and The Associated PressMay 17, 2026
18 minutes ago
Some states blast utilities for ‘blatant corporate greed’ as profits rise while consumers revolt against AI-fueled electric bills
EnergyUtilities
Some states blast utilities for ‘blatant corporate greed’ as profits rise while consumers revolt against AI-fueled electric bills
By Marc Levy and The Associated PressMay 17, 2026
37 minutes ago
A man with a headset sits at a desk in a call center.
EconomyAutomation
The AI boom hasn’t stopped U.S. companies from hiring cheap offshore labor, and overseas call center employment is still skyrocketing
By Sasha RogelbergMay 17, 2026
3 hours ago
Zillow CEO doubles down on remote-work model: ‘There is talent everywhere in this country’
Workplace Cultureremote work
Zillow CEO doubles down on remote-work model: ‘There is talent everywhere in this country’
By Marco Quiroz-GutierrezMay 17, 2026
3 hours ago
epstein on the right, deutsche bank logo, dollar bill butterflies, and christian sewing on the left in a collage
BankingJeffrey Epstein
‘The Butterfly Trust’: How Deutsche Bank maintained Jeffrey Epstein as a client until he was arrested
By Lily Mae LazarusMay 17, 2026
4 hours ago
Mary Moreland-Abbott Executive Vice President of Human Resources.
CommentaryRetirement
Gen X is the most indebted generation in America. Their employers can fix that
By Mary MorelandMay 17, 2026
5 hours ago

Most Popular

Microsoft AI chief gives it 18 months—for all white-collar work to be automated by AI
AI
Microsoft AI chief gives it 18 months—for all white-collar work to be automated by AI
By Jake AngeloMay 16, 2026
1 day ago
Former top Russian official admits the country is over Putin and can 'imagine a future without him' — even elites bail as Kremlin seizes their assets 
Politics
Former top Russian official admits the country is over Putin and can 'imagine a future without him' — even elites bail as Kremlin seizes their assets 
By Jason MaMay 16, 2026
17 hours ago
The Bezos family just donated $100 million to help achieve one of Mayor Zohran Mamdani’s top campaign promises
Politics
The Bezos family just donated $100 million to help achieve one of Mayor Zohran Mamdani’s top campaign promises
By Jake AngeloMay 12, 2026
5 days ago
‘You’re not a hero, you’re a liability’: Shark Tank’s Kevin O’Leary warns Gen Z founders to stop glorifying hustle culture
Future of Work
‘You’re not a hero, you’re a liability’: Shark Tank’s Kevin O’Leary warns Gen Z founders to stop glorifying hustle culture
By Jacqueline MunisMay 16, 2026
1 day ago
Meet the 20-year-old CEO who launched a company in high school to solve Gen Z's entry-level job crisis
Future of Work
Meet the 20-year-old CEO who launched a company in high school to solve Gen Z's entry-level job crisis
By Jake AngeloMay 16, 2026
1 day ago
SpaceX heads into a record-shattering IPO with the 'deepest moat that exists today' as investors vow to 'never bet against Elon'
Innovation
SpaceX heads into a record-shattering IPO with the 'deepest moat that exists today' as investors vow to 'never bet against Elon'
By Jason MaMay 16, 2026
23 hours ago

© 2026 Fortune Media IP Limited. All Rights Reserved. Use of this site constitutes acceptance of our Terms of Use and Privacy Policy | CA Notice at Collection and Privacy Notice | Do Not Sell/Share My Personal Information
FORTUNE is a trademark of Fortune Media IP Limited, registered in the U.S. and other countries. FORTUNE may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.