IRS TEGE: People for Customer Service; AI for Enforcement
First, there is a continued emphasis on “[d]ramatically improv[ing] services to help taxpayers.” While a bit opaque, it appears that doing so will require prioritizing the allocation of IRS employees – i.e., people – to this task. And that likely will be good news for exempt organizations and their representatives, especially given the TIGTA report released last week titled Thousands of Tax Exempt and Government Entities Taxpayers May Not Have Received Satisfactory Responses to Their Questions. The summary for that report noted:
When TE/GE taxpayer requests are unable to be resolved over the telephone, they are referred for additional action via Forms 4442, Inquiry Referral. From January 1, 2017, through May 15, 2022, the IRS may not have provided satisfactory responses to nearly 30,000 TE/GE taxpayer inquiries, including approximately 20,000 taxpayers who had to call twice and 10,000 taxpayers who had to call three or more times for the same tax return. The IRS does not track or monitor taxpayer inquiries after their questions are referred via Forms 4442.
Second, given this prioritization of people, how will the IRS fulfill its (already neglected) enforcement responsibilities in this area? The answer is it will be “smarter” – in part, by relying even more heavily on artificial intelligence tools, as indicated by these two priorities:
Collaborate with Research, Applied Analytics, and Statistics (RAAS) to continue building and refining Exempt Organizations exam case selection using advanced modeling techniques.
and
Continue to work with RAAS to develop an Artificial Intelligence capability to review and prioritize referrals received on Exempt Organizations.
RAAS is the part of the IRS that implements big data projects. It was formed in 2016 by the merger of the Office of Research, Analysis, and Statistics with the Office of Compliance Analytics. (See this TIGTA report on RAAS for more details.)
Lloyd Mayer