As part of its Digital Intake scanning project, the IRS expects to shortly begin scanning 1040 income tax returns for individuals as well as 941s for an employer’s quarterly tax returns, which represents a twentyfold increase over the same period in 2022.
Since the beginning of 2023, the Federal Revenue Agency has scanned over 120,000 paper Forms 940 for filing unemployment taxes. In an earlier report to Congress, National Taxpayer Advocate Erin Collins referred to the paper as the IRS’s Kryptonite.
IRS Digital Scanning
The Internal Revenue Service must now find a mechanism to process paper returns and, eventually, avoid a situation similar to the severe, well-publicized backlog of paper returns that plagued the agency after the COVID-19 outbreak began to spread three years ago.