The IRS will offset layoffs with artificial intelligence.
The department has laid off over 3,000 revenue agents.
The Internal Revenue Service (IRS) is implementing strategies based on artificial intelligence to address significant gaps in its workforce, following the layoff of more than 3,000 revenue agents. During a supervisory hearing held on May 6 in the House Appropriations Committee, Treasury Secretary Scott Bessent indicated that the agency will adopt AI solutions to adapt to future cuts in its budget and staff, thereby ensuring effectiveness in tax collection.
The proposed budget from the Treasury includes the elimination of another 40,000 jobs. According to Bessent, the suggested cuts to the agency's IT budget provide an opportunity to modernize and restructure the existing technology infrastructure, in an effort to reduce "wasteful" spending. He stated, "I believe that through smarter information technology and the rise of AI, we can use that to improve collections. And I hope that revenues continue to be very robust, as they have been this year."
The IRS is already using artificial intelligence for business functions that encompass operational efficiency, compliance, and fraud detection, as well as for taxpayer services. The agency has seen a decrease of approximately 11% in its workforce since Elon Musk, appointed by Trump, pushed for a reduction in the federal government through the Department of Government Efficiency (DOGE), with a target of reducing the IRS workforce by at least 40%. Internal memos have alerted staff to biweekly notices of workforce reductions.
According to a recent report from the Treasury Inspector General for Tax Administration (TIGTA), most of the layoffs have impacted revenue agents, and between January and March, 31% of these agents have been laid off or opted for a deferred resignation plan. This amounts to approximately 3,600 auditors out of their positions.
On the other hand, other federal agencies are also incorporating more AI solutions under the direction of government technology leaders. According to updated executive orders and policies regarding the use of AI in the federal government, generative artificial intelligence has become a priority target for the Department of Defense, the Food and Drug Administration (FDA), and the Department of Health and Human Services (HHS). In February, Musk announced that he was developing an AI chatbot to analyze government contracts and "increase productivity" among employees of the General Services Administration (GSA). Additionally, DOGE has begun considering the implementation of AI agents in government offices, although Musk has faced allegations of using such technology to monitor internal communications among federal workers, including those at the Environmental Protection Agency (EPA).
