IRS Turns to AI after Workforce Cuts Driven by government efficiency initiative
WASHINGTON D.C. – Facing a considerably reduced workforce, the Internal Revenue Service is deploying artificial intelligence agents across multiple divisions, including the Office of Chief Counsel, Taxpayer Advocate Services, and the Office of Appeals. This move comes months after significant personnel reductions initiated by the Department of Government Efficiency (DOGE), leading to concerns about the agency’s ability to effectively collect revenue and assist taxpayers.
The IRS is partnering wiht Salesforce, utilizing its agentforce platform to provide AI support. According to a report from axios, the AI agents will initially focus on tasks such as providing case summaries and searching documents, intended to “augment and supplement the work of these departments.”
“We don’t advocate for a blind AI processing tax returns without a human being involved in reviewing and supplementing it,” stated Paul Tatum, executive vice president of global public sector solutions at Salesforce, in comments to Axios. However,Tatum also noted that the ultimate decision on how to utilize the AI agents rests with the IRS.
The deployment of AI follows a period of notable workforce disruption at the IRS. The agency has lost over a quarter of its employees due to cuts spearheaded by DOGE earlier this year, and experienced furloughs during a recent government shutdown that impacted nearly half its workforce.A report from the Treasury Inspector General for Tax Administration reveals the IRS now has one-third fewer tax auditors than in 2024, potentially impacting revenue collection.
Experts estimate that every $1 invested in auditing the top 0.1% of earners can yield as much as $26 in recovered tax revenue, according to an analysis from Better IRS. The IRS previously estimated that full funding would allow it to collect an additional $561 billion in unpaid and overdue taxes over the next decade.
This shift towards AI coincides with the discontinuation of free tax filing programs, a move that will require more taxpayers to pay for filing services. The long-term impact of these combined changes on tax revenue and taxpayer services remains to be seen.
