Lack of IRS transparency on AI jeopardizes public trust, advisory panel says

A little more than a year ago, the IRS had listed 68 artificial intelligence use cases in its public inventory, providing details on tools aimed at everything from improving customer service interactions to flagging potentially audit-worthy returns.

Today, that use case inventory is nowhere to be found on the Treasury Department’s website, a fact that an advisory panel to the tax agency said Wednesday could undercut IRS efforts to build public trust in how it uses new technologies.

The IRS’s Electronic Tax Administration Advisory Committee (ETAAC) said in its annual report that the agency’s decision to pull down its inventory — which it said was done to “ensure IRS alignment with executive orders that remain in effect regarding AI governance” — means the public no longer has access to information about how AI is deployed in tax operations.

“Given that mistrust generally stems from the lack of understanding of a particular topic and the ease of spreading sensationalized misinformation — the latter of which tends to capitalize on the former — the government must ensure the public can quickly obtain a complete and accurate understanding of a topic, especially one as important and nascent as AI, while seldom leaving any possibility of misinterpretation that may harm public trust in the IRS,” the report stated. 

ETAAC members “strongly” recommended that the IRS republish its AI use case inventory and a “frequently updated dashboard/web page” containing a description of IRS policy positions on AI, current use cases, details on third-party data sharing and data security measures, related FAQs and more. The inventory should describe use cases “in plain language and terms easily understandable by everyday Americans, in addition to other actions that [the IRS] may take as a result of” the January AI executive order from President Donald Trump.

The advisers also pushed the IRS to conduct town hall-style meetings on AI use at the agency, ideally helmed by executives or business unit leaders who can answer questions and source ideas from the public.  

ETAAC envisions a modified approval process for AI projects led by the agency’s chief data and analytics officer that would “better guarantee a project’s success” and ease reporting mechanisms for technical issues or inaccuracies. The panel also suggests more engagement with IRS employees, seeking feedback on how they use AI in their professional and personal lives and conducting internal surveys on in-house tools.

Trump officials have said the IRS has big plans for AI at a time when the agency has undergone massive downsizing. Treasury Secretary Scott Bessent told House lawmakers last month that “smarter IT, through this AI boom” will enhance collections. New IRS Commissioner Billy Long, meanwhile, has said he wants the agency to take “clues from the private sector,” comments that one former IRS IT executive told FedScoop most likely means a greater embrace of AI and automation, specifically to “accomplish many tasks that deal with collection and refunds.”

The Taxpayer Advocate Service, which also released its annual report to Congress on Wednesday, sees a greater — and more public-facing — role for AI going forward. The independent IRS body said if the agency “can use artificial intelligence to effectively authenticate the caller and address a broader range of taxpayer issues, it can assist more taxpayers quickly and accurately, allowing employees to help taxpayers who require personal assistance.”

Other recommendations

The recommendations from both organizations come in the wake of substantial reductions to the IRS workforce. According to the TAS, the agency has lost more than 25% of its workforce since the beginning of the Trump administration.

Erin M. Collins, the National Taxpayer Advocate, wrote in her letter to Congress that reductions of that kind will likely have a major impact on the next filing season — a prediction former IRS executives have shared with FedScoop. “Looking forward, taxpayers may face more challenges,” she said, attributing such issues in part to staffing cuts.

With those reductions in mind, TAS spells out ways the IRS can use modern technology to improve services, including AI in phone calls and the exploration of other opportunities for the agency to “implement similar automation technology strategies.”

The report also pushes for increased transparency on IT modernization efforts, expanded online account capabilities, improved identity verification processes, bolstered digital service offerings and more.

“Modernizing and expanding IRS online account functionality is critical to enhancing taxpayer service, eliminating paper, and reducing burdens on traditional support channels,” TAS said. “By prioritizing taxpayer needs and ensuring inclusive, accessible design, the IRS can empower users with tools that improve compliance, reduce frustration, and build trust in the tax system.”

ETAAC’s report contains several other recommendations that touch on tech, including continued modernization enhancements, better coordination on real-time data-sharing from free filing options, an acceleration of human-centered design principles that were a hallmark of Direct File, and additional tools to combat scams and schemes promoted on social media and other platforms. 

“Currently, the IRS lacks a streamlined and comprehensive tool for taxpayers and tax professionals to provide information about identity theft, data breaches, and other scams and schemes,” the report said. “ETAAC encourages the IRS to evaluate whether the current approach supports consistent service across channels. While offering multiple tools gives the public some flexibility, there is potential for inconsistent experiences.”

This story was updated June 25, 2025, with additional material from the Taxpayer Advocate Service report.