A recent report released by the Treasury Inspector General for Tax Administration indicates that the IRS is unlikely to meet the Treasury Department’s target of scanning millions of tax returns by year-end, having scanned fewer than 35,000 Form 1040 returns by June. Even though the agency has been pilot-testing different scanning technologies to meet the expectations, the initiative is still insufficient. They plan to test a new solution, the Modernized Paper Processing System, combining AI and existing technology in the 2024 filing season. Commissioner Kenneth Corbin emphasizes a cautious approach to ensure long-term success, acknowledging progress in electronic transmission but highlighting the need for improved scanning technology. The IRS aims to transition to a fully digital environment for enhanced efficiency and security.

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