IRS expands chatbots to underreporters

Taxpayers who get notices about possible underreporting may find themselves getting help from an Internal Revenue Service chatbot.

The new tool will assist taxpayers who receive notices CP2000, CP2501 and CP3219A. These mailings go out to taxpayers if the information the IRS received from third parties doesn't match information that they themselves provided to the IRS.

"The use of chatbots in call centers has emerged as an effective practice in both the private and public sectors, making it easier for people to quickly get basic information to resolve their issues and avoid wait times on the phone," said IRS Commissioner Danny Werfel in a statement.

An IRS office building in the East Harlem neighborhood of New York
Timothy Fadek/Bloomberg

The chatbot simulates human interaction with taxpayers through a web or mobile app. It handles such taxpayer questions as what to do if they received a notice, what to do if they need more time to respond to a notice and how to find out if the IRS received their response. At the end of the conversation, taxpayers can press the "Representative" button to speak to live help.

This technology expansion is supported through the Inflation Reduction Act funding for the agency that lawmakers greenlighted last year. Since January 2022, IRS voice and chatbots, both in English and Spanish, have helped more than 13 million taxpayers avoid wait times by resolving their tax issues, including setting up roughly $151 million in payment agreements.

The IRS said it plans to continue additional bot technology features in the future.

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