IRS to use Adobe bar codes

Internal Revenue Service officials will try out several electronic forms technologies this tax-filing season, including new bar code technology from Adobe Systems Inc., as they look for additional ways to process tax returns more efficiently.

Adobe officials say the company's new offering bridges the gap between print and electronic forms at a time when digital-signature technology is not yet widely understood and available to most taxpayers. As a consequence, many citizens fill out tax forms online, print them out, sign them and submit a paper return to the IRS.

Company officials today will announce Adobe's participation in an IRS forms pilot scheduled to begin in the next seven to 10 days. As part of that, Abobe bar code-enabled forms will be distributed to 120,000 professional tax preparers and offered several weeks later on the IRS' Web site, www.irs.gov, company officials said.

For the pilot, the technology will be embedded only in IRS business tax documents called Schedule K-1 partnership forms. Company officials say the technology creates 2-D bar codes, which can encode far more information than traditional, one-dimensional ones.

With the placement of 2-D bar codes on tax forms, the IRS can process paper returns almost as efficiently as electronic ones, said Geoff Baum, product manager for the bar code forms at Adobe.

As a taxpayer fills in a tax form online, the bar code encodes the data, Baum said. Each time the taxpayer "completes a field and tabs to the next field," he said, "the bar code is updated with the user-supplied information in real time."

When the IRS receives the bar coded paper form from the taxpayer, a tool will scan the bar code, decode the data and send the information to the agency's electronic-forms processing system. Using this, the IRS can use a single back-end system to process both paper and electronic submissions, Baum said, which is more efficient than operating two processing systems -- one for paper and another for electronic forms.

Many tax preparation software packages already offer bar code-imprinted forms. Unlike Adobe's forms, most tax software forms contain embedded tax advice. Adobe's primary advantage, Baum said, is that the 2-D bar code-enabled IRS forms can be read with any Adobe reader. The company says more than 500 million free Adobe readers have been downloaded over the years.

The technology will become part of Adobe Designer, a software package for designing forms that company officials said would be ready for release in the second half of this year.

Adobe officials plan to announce the IRS pilot today in New York at the AIIM Expo, a trade show for the content and document management industry.