IRS expands AI-powered bots to set up payment plans with taxpayers over the phone

The Internal Revenue Service is handling more of its call volume through automation, which gives its call-center employees more time to address more complex requests from taxpayers.

The IRS announced Friday that individuals delinquent on their taxes, who receive a mailed notice from the agency, can call an artificial intelligence-powered bot and set up a payment without having to wait on the phone to speak with an IRS employee.

Taxpayers are eligible to set up…

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The Internal Revenue Service is handling more of its call volume through automation, which gives its call-center employees more time to address more complex requests from taxpayers.

The IRS announced Friday that individuals delinquent on their taxes, who receive a mailed notice from the agency, can call an artificial intelligence-powered bot and set up a payment without having to wait on the phone to speak with an IRS employee.

Taxpayers are eligible to set up a payment plan through the voice bot if they owe the IRS less than $25,000, which IRS officials said covers the vast majority of taxpayers with balances owed.

Taxpayers who call the Automated Collection System (ACS) and Accounts Management toll-free lines and want to discuss their payment plan options can verify their identities with a personal identification number on the notice they received in the mail.

Darren Guillot, IRS Deputy Commissioner of Small Business/Self Employed Collection & Operations Support, told reporters Friday that the agency’s expanded use of voice bots and chatbots will allow the IRS workforce to assist more taxpayers over the phone.

The IRS earlier this year answered about three out of every 10 calls from taxpayers.

“If you don’t have more people to answer phone calls, what are the types of taxpayer issues that are so straightforward that artificial intelligence could do it for us, to free up more of our human assisters to interact with taxpayers who need to talk to us about much more complex issues,” Guillot said.

IRS Commissioner Chuck Rettig said the automation initiative is part of a wider effort to improve taxpayer experience at the agency.

“We continue to look for ways to better assist taxpayers, and that includes helping people avoid waiting on hold or having to make a second phone call to get what they need,” Rettig said in a statement

Guillot said the IRS in December 2021 and January 2022 launched bots that could assist taxpayers with questions that don’t require authentication of the taxpayer’s identity or access to their private information.

These bots could answer basic questions like how to set up a one-time payment, and answered more than 3 million calls before the end of May.

But this week, the IRS expanded its capabilities and launched bots that can authenticate a taxpayer’s identity and set up a payment plan for individuals.

“It verifies you really are who you say you are, by asking for some basic information and a number that you will have on the notice you received. That gives you a phone number to call and speak with the bot,” Guillot said.

Guillot said taxpayers can name their own price for the payment plan, as long as a taxpayer pays their balance within the timeframe of the relevant collection statute or up to 72 months.

Once a payment plan is set up, the bot will close the taxpayer’s account without any further enforcement action from the IRS.

“Those taxpayers didn’t wait on hold for one second,” Guillot said.

Guillot said the IRS is ramping up its bot capability incrementally to ensure the automation can handle the volume of calls it receives. The bot, he added, is currently at about one-quarter of its full capability, and will reach 100% capacity by next week.

The bots are available 24/7 and can communicate with taxpayers in English and Spanish.

Later this year, Guillot said the bots will be able to provide taxpayers with a transcript of their accounts that includes the balance of their accounts.

Guillot said the IRS worked closely with National Taxpayer Advocate Erin Collins on the rollout of the voice bot.

“She raised legitimate concerns that some taxpayers, because they can name their price, may get themselves into a payment plan that’s more than they can afford,” he said.

The IRS is working to ensure that the bots ask some additional questions to ensure taxpayers are able to afford the payment plans they set for themselves.

Guillot said that this week’s rollout marks the first time in IRS history that the agency has been able to interact with the taxpayers using AI to access their accounts and resolve certain situations without having to wait on hold.

“I have friends and family that have to interact with the Internal Revenue Service, and when I hear them talk about how long they’re on hold that bugs me. It should bug all of us,” Guillot said.

Guillot said the IRS also added a “quick response” QR code to the mailed notices that went out to taxpayers. The QR code takes taxpayers to a page on IRS.gov showing them how to make a payment.

Guillot said the IRS originally expected to launch this capability by 2024, but was able to expedite the rollout given the perceived demand for this service.

The IRS in recent years has seen low levels of phone service that have decreased further since the start of the COVID-19 pandemic.

IRS is looking to further expand the range of services voice bots can provide, and is part of a broader effort to improve taxpayer service.

“We never lose sight of our first interaction with every single taxpayer is never enforcement. It’s a last resort. Our first effort is always around that word ‘service,’ and trying to help customers understand the tax law and almost always work out a resolution with them meaningfully,” Guillot said.

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