Don't Mess With Taxes

June 14, 2022, at 6:45 a.m. That's the precise point from which the Internal Revenue Service will never be the same.

Darren Guillot, IRS Deputy Commissioner of Small Business/Self Employed Collection & Operations Support, offered that assessment today in announcing the agency's expansion of artificial intelligence voice bots.

That date and time was when the agency flipped the switch on so-called authenticated voice bots. This new artificial intelligence system can complete more elaborate tax paying tasks for taxpayers.

More importantly, it allows taxpayers using the bots to avoid the hold times they would have faced if they called an IRS toll-free assistance line.

Latest bot steps: IRS telephone assistant bots introduced in late 2021 and earlier this year have helped more than 3 million taxpayers. The initial bots, however, are limited.

While they are available in English or Spanish, the voice and chat bots on IRS toll-free telephone tax help lines typically provide answers to only basic payment or notice questions. Where taxpayers need or want additional info, they can request to speak to an IRS telephone representative.

The new bots that went live on June 14 are authenticated, allowing a quicker way to take care of taxpayer queries and issues that require access to specific taxpayer data.

Once the interactive voice response system confirms a caller's identity, the bot can go into taxpayer accounts and help with more complex, personal tax actions.

Easing payment arrangements: The bots that went live this week are focusing on helping taxpayers set up payment plans in response to IRS notices about tax due balances.

"Our first interaction with every single taxpayer is never enforcement, it's a last resort," said Guillot in a video press conference announcing the new bots. "Our first effort is always around that word service and trying to help customers understand the tax law. And almost always, we work out a resolution with them amenably."

However, Guillot acknowledged that in recent years, even before the COVID-19 pandemic, getting to that resolution point has not been easy. It's become increasingly more difficult for taxpayers to get help, particularly via the IRS phone lines. Long wait times on hold are a recurring complaint.

Bots are a way to for taxpayers to reach the IRS without waiting. The activation this week of authenticated AI bots has expanded no-wait taxpayer options into setting up payment plans.

It generally takes 17 to 20 minutes to set up payment plan. When that's accomplished via a voice bot, that frees up real IRS employees to personally handle much more complex issues, such as requests for penalty relief or verifying hardship cases.

"Just imagine, if we're saving 17 and 20 minutes, multiplied tens of thousands, millions of times, how often that's going to make it easier for other people to get through on the phones," said Guillot.

Also helping the IRS: Not only does this help taxpayers, Guillot said, it's a bonus for the IRS.

Millions of tax filings stacked up during the coronavirus pandemic, as the IRS followed safety protocols that closed most of their offices. To help clear the unprocessed filings, the agency has shifted employees to new positions.

Guillot said almost 1,000 staff were transferred from collection services to help with the persistent COVID backlog. That included 320 IRS staff who normally would be answering taxpayer telephone calls.

That, however, created a tax Catch-22.

While the phone staff were helping clear filings, that then created follow-up notices in many cases. Taxpayers got correspondence telling then to contact the IRS, usually within a specific time frame to avoid enforcement action.

Those notice-generated phone calls were coming in to short-handed taxpayer assistance lines, adding to the service breakdown there and increasing taxpayer frustration with the agency.

The bots are picking up that correspondence and IRS follow-up call slack, said Guillot.

Timing of latest mailed notices: With the authenticated bots now operational, the agency also is staggering taxpayer correspondence to make better use of the AI option.

Of the around 5 million notices that are ready to be sent, the IRS has sent only around 3 million so that they would be delivered to taxpayers after the bots went live.

On June 16 alone, two days after authenticated bots went live, they and their more basic bot cousins answered around 13,000 taxpayer phone calls, said Guillot.

And by noon on June 14, Guillot added, authenticated bots had established the first three AI assisted tax payment plans in IRS history, going back to 1862.

"Those taxpayers didn't wait on hold for one second," he added.

Just the bot start: AI also is being used in in connection with the offer in compromise (OIC) program, where taxpayers who cannot pay their full tax bills agree to pay a smaller, reasonable amount. For the last year, bots have been applying payments and verifying that taxpayers remain in compliance.

Basic voice bots also were available earlier to callers with general questions about coronavirus Economic Impact Payments (EIPs), as well as to help individuals seeking answers about Advance Child Tax Credit payments and how to reconcile the amounts on 2021 tax returns.

Currently, said Guillot, the IRS is operating at about a quarter of its bot capability. The bot system is expected to be fully operational by the end of next week.

Further bot expansion is planned for later this year. Enhancements should allow authenticated individuals to use bots to get their tax account and return transcripts, payment history, and current balance owed.

Getting more taxpayers through the payment plan system was the catalyst for the bot creations, said Frederick Schindler, Director of IRS Collection. However, he sees IRS bots eventually expanding in not only his area, but beyond.

"Think about any collection process where you have a series of questions, there are cases for taking this technology, particularly as we learn more about it, in the future to any one of our collection processes, and any processes across the IRS," said Schindler.

More bot info: To get an idea of what the bots sound like, below are some audio clip examples.

This one is a recording of the bot offering to help set up a payment plan.

This one is an authenticated bot providing a taxpayer with two eligible options (short- and long-term payment plans).

And this one is a bot interaction to actually establish a payment plan.

If you prefer visuals, you can learn more about the IRS payment bots in this agency video:

IRS.gov also has more on payment plans and other ways to apply for one, as well as a special web page with more on its other tax self-service options.

Beyond voice bots: I don't know about you, but I'm not quite ready to welcome our IRS robot overlords, even though I'm grateful for their help reducing phone call waits and the associated hold music.

And I'm pretty sure that I don't ever want real, live IRS agents replaced by robots like the one in my IRS bots post at my tumblr tax blog Tumbling Taxes.

You also might find these items of interest:

• Options if you can't pay your tax bill in full
• Biden EO calls for improved IRS phone, online options
• New IRS tax collection notices offer QR code contact option
• IRS account facial ID still an option, but no longer required

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