AI and the Taxpayer Experience

Presented by IBM

The taxpayer experience is at the heart of the Internal Revenue Service’s (IRS) mission, and artificial intelligence (AI) is proving to be a game-changer in this area. During the "AI for Agencies" program, Reza Rashidi, Director of Data Management within the Research, Applied Analytics, and Statistics Division at the IRS, and Jason Prow, Senior Partner for Data and Tech Transformation at IBM Consulting, shared insights into how AI is transforming taxpayer interactions.

The IRS faces the monumental task of serving millions of taxpayers each year while ensuring compliance and operational efficiency. Rashidi highlights that AI is already making a significant impact in three key areas: improving taxpayer service, supporting compliance activities, and enhancing operational processes. For instance, AI tools are used to analyze taxpayer data in real-time, enabling faster and more accurate responses to inquiries.

Prow elaborates on IBM’s role in this transformation. IBM’s AI solutions are designed to go beyond automating routine tasks; they enable advanced reasoning and decision-making capabilities. For example, AI-driven tools in IRS call centers provide agents with real-time data insights, allowing them to offer personalized assistance to taxpayers. These tools also utilize natural language processing, making interactions more intuitive and efficient for both agents and taxpayers.

One of the most exciting applications of AI at the IRS is its ability to enhance compliance efforts. By analyzing vast datasets, AI can identify patterns of non-compliance or potential fraud more effectively than traditional methods. This allows the IRS to allocate resources more strategically, focusing on areas with the highest risk.

Personalized taxpayer service is another critical area of focus. AI tools enable the IRS to offer tailored solutions based on individual taxpayer profiles. This not only improves the taxpayer experience but also fosters trust and transparency in the agency’s operations.

The collaboration between the IRS and IBM underscores the potential of AI to address complex public-sector challenges. Rashidi points out that these advancements are not just about technology but also about creating a culture of innovation within the agency. By integrating AI into its operations, the IRS is positioning itself as a forward-thinking organization capable of meeting the evolving needs of taxpayers.

Prow emphasizes that the success of these initiatives depends on a strategic partnership between the public and private sectors. IBM’s expertise in AI and data analytics has been instrumental in helping the IRS navigate its modernization journey. Together, they are demonstrating how technology can be used to improve public services in meaningful ways.

As the IRS continues to embrace AI, the impact on taxpayer experiences will only grow. From personalized interactions to enhanced compliance monitoring, AI is enabling the agency to deliver more efficient, effective, and citizen-focused services. This collaboration serves as a model for other federal agencies looking to leverage AI to transform their operations.

This interviews was part of the program AI for Agencies: Modernization and Taxpayer Service which explores the transformative role of artificial intelligence within federal agencies, with a focus on the IRS's efforts to modernize operations, enhance taxpayer experiences, and optimize workforce management. Hosted by Francis Rose and presented by IBM, the program features in-depth discussions with leaders from the IRS and IBM on AI’s strategic implementation, from use-case-driven approaches to its impact on application modernization and human resource management.