Enhance IRS Transparency by Improving Applicable Technology, Sufficiently Explaining Modernization Progress, and Providing Straightforward Guidance on Tax Law

Activity 1: Make internal recommendations through TAS’s cross-functional working groups and the IRS Advisory Counsel and external recommendations through public speeches, blogs, Reports to Congress, and other avenues that the IRS be transparent when providing updates on its plans for modernization and its progress toward meeting modernization initiatives.

Activity 2: Through membership on the Data and Analytics Strategic Integration Board, the AI Assurance Team, or other cross-functional groups involved in AI oversight, review IRS uses of AI to ensure that they comply with government-wide standards on taxpayer rights and data privacy.

Activity 3: Conduct listening sessions and other forms of outreach with external stakeholders to identify areas in which the IRS has not provided taxpayers with guidance and information that is timely and clear and that adequately incorporates stakeholder feedback. Use internal meetings, blogs, and Reports to Congress to advocate for the IRS to promptly address these issues.

Activity 4: Participate on cross-functional teams implementing the IRS Inflation Reduction Act Strategic Operating Plan, evaluate planned initiatives, and make administrative recommendations to maximize protection of taxpayer rights and minimize IRS burden imposed on taxpayers. Participate on cross-functional teams implementing the IRS Inflation Reduction Act Strategic Operating Plan, evaluate planned initiatives, and make administrative recommendations to maximize protection of taxpayer rights and minimize IRS burden imposed on taxpayers.

TAS established an internal Artificial Intelligence (AI) Collaborative Team that convenes monthly to discuss the IRS’s role in the AI landscape. The team is currently managing three active Information Gathering Projects (IGPs) focused on:

1. Researching the IRS’s use of AI, including compliance initiatives developed or derived from AI and data analytics models, with an emphasis on identifying and addressessing potential biases.
2. Examining how the tax industry and broader business community leverage AI for online filing services.
3. Investigating how the IRS protects and utilizes its own data, as well as its approach to using data acquired from third parties to enhance compliance and outcomes.

TAS has embedded two representatives in the IRS AI Assurance Team (AIAT). This cross-functional team plays a critical role of ensuring the IRS adheres to all relevant AI policies, regulations, and ethical standards. Additionally, TAS released a blog that details how stakeholders can use TAS’s Systemic Advocacy Management System (SAMS) to submit issues of concern. TAS also held listening sessions with external stakeholders to discuss each of the ten Most Serious Problems (MSP) affecting the IRS. The feedback gathered during these sessions is documented in the Annual Report to Congress (ARC) which includes recommendations for the IRS to promptly address.

TAS continues to advocate and make recommendations to the IRS on how to address transparency. For example, TAS advocated by providing comments on the Taxpayer Assistance and Service Act, draft legislation that incorporates many of the National Taxpayer Advocate’s legislative proposals. The bill would enhance IRS’s transparency and communication with taxpayers in numerous ways, including clarifying the language of notices, codifying a dashboard to inform taxpayers of backlogs, expanding access to callback technology, and expanding the information available through taxpayer online accounts.

TAS participates on the Artificial Intelligence (AI) Assurance Team. However, the team is currently suspended pending additional guidance from the Office of Management and Budget and the Department of the Treasury regarding AI governance activities. We will continue to monitor during next quarter.

TAS continues to educate and gather feedback from external stakeholders. TAS established a series of seminars and listening sessions with Low Income Tax Clinic (LITC) practitioners to discuss the most serious problems (MSPs) from the 2024 Annual Report to Congress and obtain feedback on how practitioners are experiencing those issues. TAS employees regularly attended external conferences, such as bar associations like the American Bar Association, industry-related groups such as the Council for Electronic Revenue Communication Advancement, and advisory committees such as the Taxpayer Advocacy Panel and the IRS Advisory Council. TAS also performed external education to educate the public how to submit systemic issues they may be having with the IRS.

TAS worked with the transition of leadership at IRS and Treasury, making recommendations on the importance of transparency in modernization initiatives. The Objectives Report to Congress released in June emphasized that the IRS must provide clear and detailed communication to Congress and the public regarding the objectives, scope, business value, milestones, projected timelines, costs, and anticipated impacts of IRS projects to modernize taxpayer service, including the unified application programming interface (API) and the zero paper initiative.

TAS participates in the Artificial Intelligence (AI) Assurance Team although no meetings were held during the third quarter. TAS also has representatives that attend monthly Data and Analytics Strategic Integration Board meetings. Additionally, TAS has established an Artificial Intelligence (AI) team responsible for reviewing newly released and updated Internal Revenue Manuals (IRMs) related to AI, with a focus on ensuring taxpayer rights and privacy are upheld. A member of this team also reviews IRS AI use cases to monitor how AI is being integrated into the agency’s operations.

Although recent restrictions on travel and attendance of events have limited some ways in which TAS employees have historically engaged with taxpayers and tax professionals, TAS continued to conduct education and gather feedback from external stakeholders. TAS has also maintained its online presence through social media and informational resources such as Tax Tips and blogs. For example, TAS has released blogs explaining the barriers to IRS Alternative Dispute Resolution (ADR) programs, the steps the IRS needs to take to resolve Employee Retention Credit (ERC) claims, the tax challenges for small business owners and the resources available to them through TAS, as well as guidance on theft loss deductions for scam victims.

The cross-functional teams TAS was participating on have been placed on hold or disbanded. We are closing this activity. However, TAS will continue to monitor this issue through internal IRS communications and the TIGTA IRA Spending tracker: https://www.tigta.gov/inflation-reduction-act-oversight.

TAS will continue to gather feedback from external stakeholders, work within the Artificial Intelligence (AI) Collaborative Team, conduct additional research, and make recommendations. TAS will continue to monitor this issue through internal IRS communications and the TIGTA IRA Spending tracker.