IRS to use AI like 'night vision goggles' to find American's dodging tax

The Internal Revenue Service (IRS) is planning on implementing artificial intelligence-powered systems into its workflow, according to IRS Commissioner Danny Werfel.

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The statements made by the CEO of the IRS were made on April 17 at the UiPath on Tour: Public Sector Event in Washington, D.C, where Werfel explained that the IRS is looking into implementing AI in two ways: one to assist American taxpayers and the other and tools that IRS agents can use to discover undetected tax cheats.

The CEO described the potential of AI tools to the IRS as "night vision goggles" that would enable the agency to "unlock and see and spot the issues" in case of the "most complicated, largest taxpayers" across the US. As for AI being implemented in a way that would help Americans, the IRS CEO said the agency is developing an IRS chatbot that taxpayers will be able to interact with virtually and ask questions regarding the taxation process.

"I also think of a chess analogy to where we are going to be assessing some of the complexity of how money is moved across different subsidiaries, into tax shelters and holding companies," Werfel said. "Sometimes [how money is moved] is done completely legally, and sometimes, unfortunately, it's done illegally. A human makes the decision, ultimately, when we do these types of efforts on the enforcement side, but we want the computer essentially helping us be a better chess player."

Notably, the IRS will still maintain in-person and phone assistance but is attempting to catch up with many other banking apps and the virtual assistance interactions they offer their users.

"We're going to need an AI-powered solution to help taxpayers get the answer that they need," Werfel said. "But we're really just getting started."

"We have to be cautious and thoughtful with how we deploy AI," Werfel said. "We have a fundamental responsibility that is primary for us, and that is to protect taxpayer rights. And those rights include things like the right to privacy and the right that we will not add unnecessary intrusion into that privacy. We need to stay 1,000 miles away from even the perception that AI is in any way violating the responsibility we have to protect taxpayer privacy."