The IRS Is Expanding the Use of AI-Powered Bots to Set Up Payment Plans With Taxpayers Over the Phone

The Internal Revenue Service is automating more of its call volume, giving call-center employees more time to handle more complex taxpayer requests.

Individuals who are delinquent on their taxes and receive a mailed notice from the IRS 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, the IRS announced on Friday.
Taxpayers who owe the IRS less than $25,000 are eligible to set up a payment plan through the voice bot, which IRS officials say covers the vast majority of taxpayers with outstanding balances.

Earlier this year, the IRS answered roughly three out of every ten taxpayer calls. The automation initiative, according to IRS Commissioner Chuck Rettig, is part of a larger effort to improve the taxpayer experience at the agency.

These bots could answer basic questions such as how to set up a one-time payment and had answered over 3 million calls by the end of May.

However, the IRS expanded its capabilities this week by launching bots that can authenticate a taxpayer’s identity and set up an individual payment plan.

“That gives you a phone number to call to speak to the bot,” Guillot explained.

Guillot stated that taxpayers can set their own payment plan price as long as they pay their balance within the timeframe specified by the relevant collection statute, which can be up to 72 months.

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

“Those taxpayers did not wait a single second,” Guillot said.

Guillot stated that the IRS is gradually increasing its bot capability to ensure that the automation can handle the volume of calls it receives.

He added that the bot is currently at about one-quarter of its full capacity and will reach full capacity by next week.

The bots are available 24 hours a day, seven days a week and can communicate with taxpayers in both English and Spanish.

Guillot stated that the bots will be able to provide taxpayers with a transcript of their accounts, including the balance of their accounts, later this year. Guillot noted that the IRS collaborated closely with National Taxpayer Advocate Erin Collins on the implementation of the voice bot.

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

The IRS is working to have the bots ask additional questions to ensure that taxpayers can afford the payment plans they set up for themselves.

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

According to Guillot, the IRS also included a “quick response” QR code in the mailed notices that were sent to taxpayers.

The QR code directs taxpayers to an IRS.gov page that explains how to make a payment.

Guillot stated that the IRS had planned to launch this capability by 2024, but was able to accelerate the rollout due to the perceived demand for this service.

The IRS has experienced low levels of phone service in recent years, which have decreased even further since the start of the COVID-19 pandemic.

The IRS is looking to broaden the range of services that voice bots can provide as part of a larger effort to improve taxpayer service.

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