Tax forms are official legal forms filled out by a taxpayer. All eligible adults and businesses are required to pay their taxes. There are different kinds of tax forms. In fact, in the United States, there are more than 800 Internal Revenue Service tax forms available. Thus, one can only imagine how many tax forms are processed every year.
Tax forms processing starts by filling out the form with the needed information. Then, an authorized person will validate the filled-out form. Depending on the form, it could go to several authorities for approval and verification. Once approved, the tax form will now be processed for payment, and the tax authorities will record it within their system.
Since tax forms require a lot of personal and tax information, tax authorities are also using OCR technology to extract data from the filled-out form and manage them into a record management system. It makes tax form processing easier to track and more efficient than doing it manually.
Furthermore, automating tax form processing with OCR prevents data mishandling due to human error. Verifying the taxpayer information and signature is easier and more accurate. Lastly, it enhances security as going paperless reduces the risk of losing the tax form.