As tax season 2026 approaches, the IRS is turning to artificial intelligence to fill the gaps left by recent layoffs. With fewer employees, the IRS plans to deploy AI to manage tasks such as reviewing tax-exempt status applications and processing amended filings.

The Treasury Department recently released a substantial AI use case inventory, highlighting 129 initiatives, with 61 dedicated to the IRS. These efforts are a significant leap from 2024 when the Treasury was exploring 54 AI projects focused on IRS operations.

Job reductions, particularly in the IRS’s IT department, have driven the agency to embrace AI across various functions. Machine learning models will assist with processing reports, managing support tickets, and automating internal research tasks, among other applications.

IRS’s AI initiatives also aim to enhance interactions with taxpayers via chatbots, streamline identity verification, digitize paperwork, and improve customer service analysis. Internally, AI is set to rank job applications, support staff, and aid in procurement processes.

Despite earlier plans to use AI in tax collection, the new inventory makes no mention of such applications, suggesting a shift in focus. The Treasury did not comment on the reason for this change.