Dan Baum, vice president and general manager of paper-to-digital at Adobe Systems Inc., and Paul Showalter, senior analyst of the Internal Revenue Service's publishing division, presented a detailed session on how 2-D bar-code technology works with PDF and Adobe Reader to promote efficient and accurate transfer of data from paper forms into electronic back-end systems by automating data extraction from "fill-and-print" forms. ("Fill-and-print" forms are forms that are obtained electronically, printed to paper and submitted in the next step as paper.)

Baum began by discussing the existing challenges that often face paper form processing. Paper form use persists for multiple reasons: multiple signature requirements, customer preference, the need for supplemental attachments, or necessary CPA and legal review.

An organization's IT infrastructure can complicate matters further, for there are often disconnected processing systems for paper and electronic form workflows.

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"It's very hard to accurately transfer information back and forth between those workflows," Baum said. With a smile he described a "swivel chair" integration—swiveling back and forth between the desk and filing cabinet to transfer information.

Add to that the costs of manual processing and data integration, as well as the correction of inaccurate data—often a more expensive task than the initial data entry—and you've got a multibillion dollar (about $15 billion to $20 billion annually on manual data entry) industry of simply transferring data.

And while data accuracy for initial manual input is 96 percent to 98 percent—and 90 percent for OCR-based solutions—data accuracy is 100 percent for 2-D bar-code technology. "You don't have to have a human in the loop anymore," Baum said.

Baum described how the 2-D bar-code technology works: An author designs a PDF fillable form using technology connected to their database, such as XML. Users then fill in the form electronically online or offline with a free Adobe reader, with the bar code updating automatically on the form as they type. The user then prints the form and submits it either via fax or mail, to be scanned into a bar-code scanner that will capture all data with 100 percent accuracy.

"You'll only have to have one back-end system," Baum said. "And from an IT management perspective, I think it makes a much cleaner solution."

Adobe Systems offers a 2-D bar-coded product called Adobe LiveCycle Bar-coded Forms, which users can fill in using Acrobat 7.0 or Adobe Reader 7.0 software. Adobe also offers the Adobe LiveCycle Barcoded Forms 7.0 decoder, which automatically scans completed forms, reads 2-D bar codes and extracts the data. More information can be found on the Adobe LiveCycle site.

Showalter presented a case study about the IRS' implementation of 2-D bar-codes in both 2003 and 2004.

Individual states took the lead in using 2-D bar-code forms, Showalter said. The IRS also noticed an increased reliance on tax software. But, he said, "A significantly high percentage were being created electronically and then printed out to paper. They're doing all the keyboarding; why don't I take that benefit and use it?"

The IRS rolled out three optional 2-D bar-coded forms for the tax year 2003: the 1041, the 105 and 1120S Schedule K-1. The results? Eight percent of all 1120-S Schedule K-1s received were 2-D bar-coded—about 1.5 million forms.

For the 2004 tax year, they officially offered forms 1065 and 1120-S Schedule K-1 as 2-D bar-coded. (Both are available for download at IRS.gov.) By March 2005 the IRS had received about 500,000 forms, and Showalter estimates they've received in excess of a million this year.

Showalter said they were pleased with the results and that they plan on converting more forms to 2-D bar code in the future. "Ideally everyone would file electronically, but it's a nice transitional step between paper and electronic for now," he said.

"When we started considering it, people said why would you use such old technology?" he added. "And it is old technology, but it's proven technology. You're not on the bleeding edge with it. But if you take old technology and use it in an interactive form, well, that is new technology," Showalter said.

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