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The Finance Base
The Money Desk · Blog
Re:

IRS Plans to Expand AI Use, but No 2027 Filing-Season Rollout Is Confirmed

The IRS’s FY 2027 plans include expanded AI use for enforcement and IT monitoring, but official materials do not confirm a 2027 filing-season rollout or AI-only audit decisions.
From TheFinanceBase Team2 min to read
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The IRS says it is using AI and advanced analytics to identify high-risk areas of noncompliance and fraud, and its FY 2027 budget documents describe plans to expand their use. But those documents do not establish that a new AI capability will be deployed for the 2027 tax filing season, or that AI alone will decide who is audited.

What the IRS says it is doing with AI

In testimony before the Senate Finance Committee, IRS CEO Frank J. Bisignano said the agency is using AI and advanced analytics to identify high-risk areas of noncompliance and fraud. He also described modernizing information systems and sharing data across platforms as part of improving detection.

The IRS’s FY 2027 Congressional Budget Justification sets out a broader future direction: expanded use of AI, advanced analytics and improved data integration to modernize enforcement. The agency says these tools are intended to help identify high-risk noncompliance and fraud, deter identity theft, and focus enforcement resources on higher-value cases while minimizing burden on compliant taxpayers. Those are stated goals, not independently demonstrated results.

What is planned—and what is not confirmed

The FY 2027 budget justification presents AI-supported enforcement alongside priorities such as expanding secure online services and protecting taxpayer privacy and security. A budget request describes funding priorities and intended direction; it does not by itself confirm that every proposed capability has been funded, deployed or shown to improve outcomes.

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The IRS FY 2027 Capital Investment Plan provides a more specific example. Under FY 2026/2027 future objectives, it identifies expanding AI use in AppDynamics and Splunk Information Technology Service Intelligence (ITSI) for predictive analytics and automated remediation. This is planned work concerning technology monitoring and remediation; the plan does not give a date tied to the 2027 filing season or report a measured filing-season result from the proposed work.

Does IRS AI mean an AI system will choose who gets audited?

The official statements support a narrower conclusion: the IRS says it uses AI and analytics to identify higher-risk areas of noncompliance and fraud, and it intends to expand related capabilities. They do not establish that AI independently makes audit decisions, or describe the decision process for selecting individual taxpayers for examination. Risk identification and an audit decision should not be treated as interchangeable.

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Will the plans affect the 2027 tax filing season?

The reviewed FY 2027 budget and capital-plan materials do not provide a deployment calendar for the 2027 filing season. They therefore do not establish which planned capabilities, if any, will be operational when taxpayers file returns in 2027. The documents describe agency priorities and future objectives, not a confirmed filing-season rollout or a forecast of how taxpayers’ returns will be handled.

Recent filing-season statistics offer context, but not evidence of an AI effect. The National Taxpayer Advocate’s June 24, 2026 report summary says the IRS processed 138,567,000 individual returns and issued 90,411,000 refunds during the 2026 filing season. The same summary documents difficulties for some taxpayers, including returns suspended for review, delayed refunds, trouble reaching live assistance and prolonged identity-theft case resolution. Aggregate processing totals do not capture every taxpayer’s experience.

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What the IRS policy says about taxpayer information

The IRS Internal Revenue Manual prohibits inputting or uploading personally identifiable information, federal taxpayer information, statutorily protected tax information and other listed restricted information into public, non-Treasury or otherwise unauthorized AI systems. This is a restriction on using unauthorized systems. It should not be read as a claim that taxpayer information is never processed by any AI system.

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