The Internal Revenue Service has been rolling out live chat applications with customer service representatives and automated chatbots in recent years, but the questionable answers they provide could prompt taxpayers to file incorrect tax returns, according to a new report.
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TIGTA said its review of statistical reports from the IRS identified outliers and discrepancies that made the reliability of the IRS’s reports questionable. For example, the reports showed one live assistor handling as many as 603 live chats at the same time, which the IRS admitted was incorrect because the system limits the number of concurrent chats to three.
There were also problems with the chatbots. TIGTA identified 29 responses and 44 keywords or questions where the ACS automated chatbot did not provide sufficient information or was not able to recognize the keywords or questions typed into the search box. It notified ACS management and they subsequently began taking corrective actions to address the deficiencies.
The IRS began using live chat applications in November 2017 by introducing live chat as a pilot program. In December 2021, the IRS expanded its chat applications to include automated chatbots, and in 2023 it
“The IRS implemented chat applications to improve customer service by promoting the use of online services and providing an alternative communication method for taxpayers in lieu of calling the IRS toll-free line,” said the report. “If they operate efficiently, it could result in increased service provided by the toll-free line. However, if chat applications do not provide accurate and sufficient information, it could lead taxpayers to file an inaccurate tax return or require them to contact the IRS again.
The report found that IRS management has not taken sufficient steps to evaluate the effectiveness of the Automated Collection Service function’s chat applications, but the ACS chat program still expanded anyway. Compounding this issue, the data currently collected to measure the performance of the program is unreliable, which limits the IRS’s ability to determine whether the expanded program is operating effectively.
The IRS hasn’t analyzed its chat applications and doesn’t have any performance measures for them because it still considers them to be in the pilot stage, even though they’ve been in use for years. ACS management only conducted nonevaluative performance reviews of live chat assistors, but TIGTA pointed out that nonevaluative reviews cannot be used as part of the employee’s performance appraisal. Although there’s no agencywide policy that prohibits evaluative performance reviews during a pilot program, ACS management said they plan to implement evaluative reviews in April 2026.
TIGTA made nine recommendations in the report to the IRS, including developing a process to validate the accuracy and completeness of the ACS chat applications’ data; establishing standards to assess the effectiveness and efficiency of the ACS chat applications; and implementing guidance for conducting evaluative reviews for live assistors. IRS officials agreed with all nine recommendations and plan to implement corrective actions for five of the recommendations such as validating the accuracy and completeness of ACS chat applications’ data. The IRS also said it has already implemented corrective actions for the remaining four recommendations such as implementing guidance for managing the ACS live chat application, and evaluative reviews for employees working ACS live chats.
“Since its launch, the chat program has grown significantly and now serves millions of taxpayers annually,” said Lia Colbert, commissioner of the IRS’s Small Business/Self-Employed Division, in response to the report. “Chatbots offer automated, around-the-clock access to information and services, while allowing taxpayers to transition to a live assistor when more complex support is required. These channels support key service activities, including installment agreement assistance and other account-related actions.”
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