IRS Could Lay off 30,000+ Employees by August: Is AI Taking Their Place?

The IRS plans to automate its department in the coming years. 

It is currently speculated that over 30,000 IRS employees would face layoffs by the end of 2025. 

Former IRS employee roles are set to be replaced by automated systems and AI technologies.

Customer service and data privacy are top concerns for both taxpayers and government watchdogs.

AI and automation are reshaping the workforce nationwide, and their implications extend beyond staffing.

Why is AI replacing IRS Staff?

The IRS has operated on outdated and inefficient systems for a long time. 

Technological advancements are now being taken as opportunities for the agency to minimize long wait times and reduce the IRS backlog. 

Key Reasons for the Shift:

• A restricted budget requires internal workforce restructuring
• Advanced AI and language models automate lower-level tasks 

The US Treasury Secretary Scott Bessent recently stated that the “AI boom” could be used as a tool to enhance collection and improve overall taxpayer support.

What Jobs at the IRS Are at Risk?

Lower-level entry jobs are more likely to be replaced by AI technology within the IRS workforce. 

Administrative and entry-level positions are more likely to be phased out over the next few years.

Potential Layoff Targets:

• Call center staff
• Mailroom staff
• Manual reporting staff
• Data entry staff

As of now, the IRS plans to hire staff workers to manage and automate these systems. 

How will the IRS use AI? 

The IRS is already automating several areas of the agency with AI technology:

• Customer support is being replaced with AI chatbots and voices.
• Machine learning models are being used for fraud detection.
• Document processing is being reviewed by character recognition software.
• Correspondence is handled by language processing tools.
• Returns and audits anomalies are handled with AI detection.

While technological advancements are the way of the future, AI has yet to fully replace human judgment on complex tax issues. 

What are the Public Concerns Over the IRS using AI? 

AI and other advancements in technology are used to reduce operational costs and increase efficiency; however, there are questions raised:

• Will taxpayers be stuck talking to AI bots rather than human customer service?
• Is sensitive taxpayer data secure in these automated systems?
• Will machine limitations increase errors and taxpayer frustrations?

Lawmakers and privacy advocates continue to push for transparency on AI’s role in the IRS and how the agency will continue to keep taxpayer data safe.

What Should You Expect as a Taxpayer in 2025?

As the IRS continues to adapt to digital technology and AI, some impending changes include: 

• Fewer human agents and customer service representatives
• Faster e-filing process and returns
• Increased automated notices and letters
• More online tools and access to IRS resources

Human intervention will still be necessary for complex issues like audits and appeals. But, overall, the IRS is set to replace much of its human staff with fully digital systems in the coming months.

Conclusion: The IRS Operations & AI Advancement

The IRS restructuring of agency operations in the coming digital age sees the possibility of over 30,000 IRS employees being replaced by automated AI technology. 

Whether this will lead to less waiting and easier communication with the IRS on the taxpayer's behalf is dependent on how the IRS balances real human support with AI automation. 

If you’re concerned about how this restructuring will affect your tax situation, Tax Attorneys of America offers live expert assistance, powered by real people.

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