IRS rolls out artificial intelligence to help callers make payments, resolve simple tasks

The Internal Revenue Service unveiled a new artificial intelligence system it says will cut wait times to resolve simple tasks and improve customer service.

The technology enables the new phone system to authenticate callers by asking them basic questions, IRS officials said during a call with reporters Friday. The new system can understand complete and natural ways of speaking, they said.

“For the first time in 160 years, this agency is able to successfully interact with a taxpayer using artificial intelligence to access their account and resolve it, in certain situations, without any wait on hold,” IRS Deputy Commissioner Darren Guillot said during the call .

When taxpayers receive a mailed letter stating they owe money, they can use an ID number from the letter to call in and access the improved system, agency officials explained.

Frederick Schindler, the agency’s director of collection, said his team staggered the generation and mailing of over 3 million letters so they will arrive in mailboxes in the coming days, enabling callers to make use of the new system.

PHOTO: In this photo illustration an IRS logo seen displayed on a smartphone.

In this photo illustration an IRS logo seen displayed on a smartphone.

SOPA Images/LightRocket via Getty Images, FILE

The IRS’ efforts to improve its phone system come roughly three months after the statutory body said it would hire 10,000 additional employees to cut through a pandemic-related backlog.

Expanding the phone bot with artificial intelligence demonstrates an improvement over the previous phone system, the IRS officials said. The previous unauthenticated phone bot could only answer basic questions and allowed callers to set up one-time payments, they said.

That more basic technology, which does not allow the system to pull up a person’s IRS account, is also the technology behind an online chatbox the agency uses.

Because of the authentication capability of the new bot, it can access a caller’s IRS account. From there, callers can “discuss” and set up a payment plan with the bot without spending time on hold –– a process that would typically take 17-20 minutes with a human operator, IRS officials said.

By allowing the phone bot to handle more simple issues, it frees up human operators for more complex matters, the IRS officials said.

Treasury Department Deputy Secretary Wally Adeyemo recently told ABC News that “the IRS received over 200 million calls and only had 15,000 people to answer those calls” last year.

Even with the intelligent phone bot, callers will still have the option to speak with a human for additional support, IRS officials said.

Many callers owe less than $25,000, and can “name their price,” or the monthly amount they will commit to paying. The artificial intelligence system then computes that amount to determine whether it falls within the agency’s deadline for repayment.

PHOTO: The Internal Revenue Service building is seen in Washington, DC, April 5, 2022.

The Internal Revenue Service building is seen in Washington, DC, April 5, 2022.

Stefani Reynolds/AFP via Getty Images, FILE

The new bot will not guide callers to pay more than the price they name, the officials explained.

While officials on the call admitted the new phone bot will offer a return on investment through expanded compliance, he said increasing government revenue was not the primary focus of developing the system.

“Service is part of our name,” Guillot said. “This is all about the taxpayer experience, helping customers,” he said later.

But not all callers will enjoy the no-wait time the authenticated phone bot offers. It launched only on the automated collection system and accounts management phone lines Tuesday, the IRS officials said.

For now, it is operating at 25% of its intended capacity, which saw the bot answer over 13,000 calls Thursday. The IRS plans to bring more of the system online through the end of next week, IRS officials said.

“We have phone lines to deal with specific issues like liens or settlement proposals,” Schindler said. “In the future, there’s use cases for taking this technology, particularly as we learn more about it, to any one of our collection processes.”

The bot currently operates in English and Spanish, with IRS officials hoping to expand its language offerings in the future, they said.

More immediate expansion plans include programming the authenticated bot to ask questions of callers who name their monthly payments to ensure it is within their financial means, the officials said.

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