IRS Planning to Use AI Tools for Taxpayer Service Modernization

The Internal Revenue Service is exploring the use of artificial intelligence to enhance taxpayer services as part of its modernization efforts.

Speaking at the UiPath public sector event on Wednesday, IRS Commissioner Danny Werfel said the technology can simplify how taxpayers seek answers to tax-related questions or challenges and enable automated operations to reduce mistakes and boost the IRS’s integrity.    

According to Werfel, the agency is using Inflation Reduction Act funds to develop AI-enabled solutions such as chatbots to eliminate the need for taxpayers to wait over the phone or at in-person centers to get the answers they need, FedScoop reported.

The IRA provided the agency with $80 billion in funding to upgrade its IT systems and digital asset monitoring capabilities to address inefficiencies in the IRS resulting from the continuous use of outdated systems and incompatible digital case management systems.

A previous FedScoop report indicated that the budget will also allow the IRS to procure technology to boost criminal investigations linked to cybercrimes and cryptocurrencies.

Werfel said the agency is looking at using AI tools to address pressing issues, including those related to tax fraud and tax noncompliance.