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IRS Uses AI Chatbots to Assist Taxpayers

IRS introduced expanded AI chatbot technology to help quickly answer basic questions about possibly underreported taxes.

IRS Uses AI Chatbots to Assist Taxpayers

The Internal Revenue Service (IRS) announced the availability of a new chatbot feature to assist taxpayers who receive notices CP2000, CP2501 and CP3219A. These notices mean that the tax information the IRS received from third parties doesn’t match the information taxpayers provided to the IRS.

“We understand receiving a notice from the IRS can be concerning, and people frequently have questions. The use of chatbots in call centers has emerged as an effective practice in both the private and public sectors, making it easier for people to quickly get basic information to resolve their issues and avoid wait times on the phone. Deploying chatbots at the IRS call center helps taxpayers get their issues resolved quicker, and it helps free up valuable phone resources for other taxpayers with questions on more complex issues.”

RS Commissioner Danny Werfel

The expanded capabilities are part of IRS’s transformation of public communication channels. Since January 2022, the IRS has been introducing and improving its voice and chatbot services, both in English and Spanish. According to the agency, AI tools have helped more than 13 million taxpayers avoid wait times and resolve their tax issues. By rough estimations, IRS chatbots have already set up roughly $151 million in payment agreements.

The new IRS chatbot can help taxpayers with such questions:

  • What to do if they receive a notice?
  • What to do if they need more time to respond to a notice?
  • How to find out if the IRS received their response?

The IRS aims to introduce additional bot technology features in the future to help taxpayers with more complex issues, currently referred to a human support professional.

The efforts to facilitate the process of filing taxes are very important for Americans who, estimatedly, spend over 29% of their income paying taxes each year. National authorities levy taxes at federal, state, and local levels.

Besides, this August, US Treasury and IRS proposed crypto tax reporting rules, aiming “to close the tax gap, address the tax evasion risks posed by digital assets, and help ensure that everyone plays by the same set of rules.”

Nina Bobro

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Nina is passionate about financial technologies and environmental issues, reporting on the industry news and the most exciting projects that build their offerings around the intersection of fintech and sustainability.