IRS Halts AI Modernization: Tax Refunds and Office Changes May Cause Delays
The IRS has paused its artificial intelligence (AI) modernization efforts, potentially impacting tax refund processing times and service availability for taxpayers.
Treasury Secretary Scott Bessent maintains confidence in AI's role in tax administration, but the temporary halt could lead to increased manual processing and possible refund delays. Despite these changes, the IRS confirms that taxpayers can continue filing returns as usual.
Internal changes are also affecting the agency. William Paul, the IRS's acting chief counsel, faces demotion amid discussions about the Department of Government Efficiency (DOGE) accessing taxpayer data for federal benefits and immigration verification. Legal experts express privacy concerns about this potential data sharing.
Man outside IRS headquarters
DOGE's cost-cutting initiatives include closing numerous federal office locations, which may reduce in-person IRS services and support for taxpayers dealing with refunds or audits.
To minimize delays, taxpayers are encouraged to use electronic filing options:
- Direct File
- IRS Free File
- Direct deposit for refunds
While these changes may result in longer processing times and increased scrutiny of returns, electronic filing remains the most efficient way to receive refunds quickly. Taxpayers should prepare for possible delays and limited in-person support during this transition period.