Issue Summary
The Internal Revenue Service’s (IRS) mission is to provide American taxpayers with top-quality service by helping them understand and meet their tax responsibilities. It is also responsible for enforcing tax laws. After facing declining resources and increased workload for many years, in 2022, the IRS was appropriated tens of billions of dollars in funding over 10 years to modernize its operations and improve service and enforcement. There are a number of areas that IRS needs to address in doing so.
For instance:
- IRS reform. IRS is undertaking significant changes to its organization, technology infrastructure, and resource allocation. As IRS reorganizes and reassesses priorities, leveraging leading reform practices—including having clear goals, following a process that engages Congress and other key stakeholders, and effectively allocating resources—can help inform its transformation.
- Customer service. The IRS has struggled to provide customer service and process returns in a timely manner in recent years. Throughout 2025, thousands of IRS staff resigned or retired early, further threatening IRS’s ability to meet its mission. The agency has continued to struggle to meet taxpayer service needs, including balancing telephone and correspondence services. For example, while IRS answered more phone calls in recent years with taxpayers waiting less time on hold, it was late responding to taxpayer correspondence more than half the time.
Millions of Taxpayers Await Responses From IRS
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- Artificial intelligence. To help with its operations, IRS has been using AI in areas such as audit selection and answering taxpayer questions. However, its plans to expand the use of AI face challenges. For example, IRS does not have enough skilled employees to support or develop new AI tools. IRS should develop a workforce plan to identify and address the skills its AI workforce needs.
IRS AI Use Cases by IRS Category and Life Cycle Status
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- Regulations. Treasury and IRS issue regulations to help taxpayers understand and apply tax law. In recent years, Treasury and IRS have been affected by significant legal decisions, changes in the requirements for rulemaking, and rapidly evolving technologies that enable public comments. For instance, AI can write slightly different comments on the same issue for multiple people, making near-duplicate comments harder to identify, which can overwhelm officials.
- Enforcement. IRS has faced challenges with staffing shortages for several years, especially for key enforcement areas, even before workforce reductions in 2025. For example, IRS lost a significant number of staff who could audit high-income/high-wealth individuals. Developing and implementing a strategy to hire and train staff to audit these complex cases would help IRS enforce tax laws, enhance federal revenue, and reduce burdens on compliant taxpayers.
- Data safeguards. Taxpayers expect IRS to protect their sensitive personal and financial information. If taxpayers are not confident that IRS will do so, they are less likely to comply with tax laws. While IRS has safeguards in place to protect taxpayer information, it has several weaknesses in its information systems and contractor oversight, among other things.
Recent Reports
GAO Contacts
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