Technology is Transforming the IRS: Three Big Changes You Need to Know About
Working with the IRS is a nightmare.
Long waits, agents that don’t know what they’re doing, “courtesy” disconnect— it’s about as fun as having a tooth pulled.
But new technology is on its way; some of it is already here, which should make dealing with the IRS at least a little less painful? Hopefully?
Let’s talk about what’s coming.
Introduction
Dealing with the IRS is SO frustrating, in part because their technology is about 20 years behind what everyone else uses. Well, that may change because the IRS got a boatload of money from the “Inflation Reduction Act” (I STILL find the name funny), some of which is being used to update their technology.
Let’s dive into how technology has already started to change the IRS this year and what it means for us.
This is Important
The technological changes within the IRS will directly impact how you and your clients handle tax debts, audits, and compliance, so you want to stay informed. Understanding these changes allows you to take advantage whether you’re a tax professional helping your clients or a taxpayer yourself.
Key Points
There's already been three major technological shifts at the IRS this year:
Why they matter.
The shifts in 2024 include the following:
Advanced Data Analytics
AI-Powered Assistance
Blockchain for Security
Let’s look at the details of each:
Advanced Data Analytics: The IRS’s Crystal Ball
The IRS has always been thorough, but now it’s a whole new level.
Using powerful algorithms and data-mining techniques, the IRS can now quickly spot patterns and anomalies in financial data.
What does this mean for you?
Essentially, the IRS is better at spotting errors and inconsistencies.
If you diligently prepare your return and follow the rules, you might feel like this doesn't affect you. And for the most part, it doesn't. The problem is that now even minor mistakes will be detected more easily, which could lead to more audits and inquiries for everyone.
It’s intimidating. And it means that keeping your records straight has never been more important.
2. AI-Powered Assistance: The New IRS Helpdesk
The days of long hold times and frustrating calls to the IRS are evolving.
The IRS is starting to use AI chatbots and virtual assistants designed to provide support around the clock. These systems can answer questions, guide you through filing processes, and offer advice, in certain situations at least.
Sounds great, right?
We know how powerful AI is already and it’s only going to get better.
But right now, AI is just a bunch of robots answering questions. They’ll always be robots…I think…but as of now, you can easily tell that they are robots. You can tell they are because they sound like a bunch of robots.
For straightforward issues, they may be enough, but they lack the nuance and understanding that a human brings to the table when there's a complex issue.
That said, nuance and understanding is not exactly a strong suit of the professionals working for the IRS right now!
3. Blockchain for Security: Protecting Your Data
Data security is more critical than ever.
That’s why the IRS has adopted blockchain to safeguard sensitive taxpayer information. Blockchain’s decentralized and tamper-proof design makes it the best choice for preventing data breaches.
This means enhanced protection of your personal information.
However, blockchain has its problems, one of which is that once data is entered, it’s challenging to alter. This makes accuracy on your part crucial because errors in your records may be difficult to correct.
While blockchain offers peace of mind, it also means don’t mess up.
TL/DR (Too Long; Didn’t Read)
In 2024, the IRS is leveraging advanced data analytics, AI-powered assistance, and blockchain technology to enhance its operations.
Advanced data analytics help the IRS spot discrepancies more accurately.
AI-powered chatbots offer efficient, 24/7 support but can’t replace human expertise for complex issues.
Blockchain technology secures taxpayer information, ensuring data integrity but demanding high accuracy.
As the IRS continues to evolve with these technological advancements, staying informed and prepared is more crucial than ever.
Understanding and leveraging these advancements to your advantage can make a significant difference, which is why hiring a tax professional with expertise in IRS collections is increasingly important.
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Has anyone noticed the new technology that the IRS is using?
Have you had any problems with it?
Let me know in the comments!
As always, thank you for reading.
I sincerely appreciate your continued support of Resolving Tax Debt.
