How Can AI Drive Better Taxpayer Experience and Improved Tax Agency Operations?

Submitted by on Fri, 01/26/2024 - 17:23
Friday, January 26, 2024
Dan Chenok
A new report identifies challenges and opportunities for artificial intelligence to help the IRS, and tax agencies globally, modernize to serve the public.

Blog Co-Author: Paul Dommel, Partner, Federal Tax and Finance, IBM Consulting

Interest in artificial intelligence (AI) has surged across government. National and international legislation has been proposed, and U.S. Federal agencies are now implementing requirements set forth in the new Executive Order on AI. Such policy and progress affect government work across civilian and defense sectors—including work done by tax agencies with the public and business communities.

Driven by common access to AI and the potential benefits of generative AI, the U.S. Internal Revenue Service (IRS) and tax agencies around the world are now focusing on how the technology could improve tax administration while minimizing some of the risks. To better understand opportunities and considerations, the IBM Center, in collaboration with the American University Kogod School of Business Tax Policy Center, recently hosted a global discussion on AI and the Modern Tax Agency. The findings inform the release of a new report, AI and the Modern Tax Agency, by Caroline Bruckner and Collin Coil with the AU Kogod Tax Policy center.

The report focuses on three key topics:

  • How can AI and related technologies better enable taxpayers, including small businesses, to navigate tax filings and address emerging areas of concern?
  • Where is AI today in terms of streamlining operations, and what is its potential to improve tax administration?
  • What are key considerations for governance and developing transparent and ethical AI?

Based on insights from roundtable participants and research by the authors the report provides analysis and makes recommendations for the IRS and tax agencies around the world to leverage AI to improve customer service and education, compliance and enforcement, and risk management—and to do so while mitigating risk and building trust through the use of AI.

We hope that this report provides leaders and stakeholders of tax agencies with insights on how best to apply AI to improve results for taxpayers.