A good insight into this is to take a look at how e-filing works. It's been several years since I've looked at it but you could find the documentation and XML s

A good insight into this is to take a look at how e-filing works. It's been several years since I've looked at it but you could find the documentation and XML schema files online from the IRS that companies like Intuit and others use to transmit their e-filings. From what I recall the XML corresponded one to one with the paper forms. If you think about how the paper forms work it's pretty straight forward. You go top to bottom entering data and making calculations. Sometimes there are rules (if this line is less than X, goto Y) that you would have to write somehow. As to how they store it I can only speculate. I imagine they're stored as blobs by return/form. I doubt they would be stored in some denormalized form as it seems unnecessary and difficult. They don't need to query across all people's returns at once. They're probably batch processed return by return.