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Back to News List

IRS plans AI integration to offset massive layoffs of tax agents

May 9, 2025•Chase DiBenedetto•Original Link•2 minutes
IRS
ArtificialIntelligence
GovernmentTech

The IRS has laid off over 3,000 revenue agents and plans to use AI to fill the gaps in tax collection and enforcement.

The Internal Revenue Service (IRS) is planning to leverage artificial intelligence (AI) to compensate for significant workforce reductions, including the termination of over 3,000 revenue agents.

Key Developments:

  • Massive Layoffs: The IRS has already cut 11% of its workforce, including 3,600 auditors, under the Department of Government Efficiency ("DOGE") led by Trump appointee Elon Musk. Further cuts of 40,000 jobs are proposed.
  • AI Integration: Treasury Secretary Scott Bessent announced during a House Appropriations Committee hearing that the IRS will use AI to modernize tax collection and offset staffing losses. The agency claims AI is already employed for "operational efficiency, compliance, and fraud detection."
  • Budget Cuts: The IRS faces reduced IT funding, but Bessent framed this as an opportunity to adopt "smarter" technology solutions.

Broader Government AI Push:

  • The Trump administration has prioritized AI across federal agencies, including the Department of Defense, FDA, and HHS, through executive orders and policy updates.
  • Elon Musk’s DOGE is developing an AI chatbot for government contracts and reportedly staffing a project to deploy AI agents in government offices.
  • DOGE has also been accused of using AI to monitor federal workers’ communications.

Concerns and Implications:

  • Critics warn that replacing human agents with AI could undermine taxpayer services and oversight.
  • The IRS’s reliance on AI aligns with Musk’s broader goal of shrinking the federal workforce, but its effectiveness remains untested.

IRS employee in front of "new equipment" sign

Credit: Jordan Vonderhaar / Bloomberg via Getty Images

For more details, read the full report from The Register.

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About the Author

Dr. Lisa Kim

Dr. Lisa Kim

AI Ethics Researcher

Leading expert in AI ethics and responsible AI development with 13 years of research experience. Former member of Microsoft AI Ethics Committee, now provides consulting for multiple international AI governance organizations. Regularly contributes AI ethics articles to top-tier journals like Nature and Science.

Expertise

AI Ethics
Algorithmic Fairness
AI Governance
Responsible AI
Experience
13 years
Publications
95+
Credentials
2
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