IRS could use AI to replace workers after mass layoffs

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Fired workers could be replaced with bots

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  • The IRS plans to use AI to supplement its workforce
  • The organization has laid off 25% of its staff
  • More cuts are likely to follow, report claim

The US Internal Revenue Service (IRS) plans to use AI to replace workers having made extensive cuts to its workforce.

US Treasury Secretary Scott Bessent discussed the budget proposal in a House Appropriations Committee hearing, with reports confirming the IRS has lost almost a third of its tax auditors since the start of the second Trump administration - with Elon Musk’s Department of Government Efficiency (DOGE) trimming the workforce through layoffs and ‘deferred resignations’.

Bessent argued further proposed reductions and plans to push further layoffs would not affect the agency’s tax collection abilities thanks to the “current AI boom” - although he didn’t explain exactly how the agency will be deploying the tech.

Slash and burn

The ramifications of personnel reductions will not result in a loss of capability, despite the majority of those fired being revenue agents, with 31% of the IRS’s revenue agent workforce laid off.

"I believe through smarter IT, through this AI boom, that we can use that to enhance collections and I would expect that collections would continue to be very robust as they were this year," Besset said.

The 25% reduction in workforce for the IRS could lead to potential delays in tax refunds for American taxpayers, but it seems the cuts are likely to continue.

Musk’s DOGE department has also cancelled multiple government contracts in the name of cost-cutting, including with IBM, Deloitte, and Gartner - to name just a few.

Over half of UK businesses who replaced workers with AI now report regretting their decision, and there’s huge amounts of uncertainty - with 38% of leaders not fully understanding AI’s impact in their business, and 25% unsure of which roles are most at risk.

Tech giants including IBM, CrowdStrike, and, most recently Google, have been cutting staff in recent months, with many are planning to replace these jobs with AI.

Via The Register

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Ellen Jennings-Trace
Ellen Jennings-Trace
Staff Writer

Ellen has been writing for almost four years, with a focus on post-COVID policy whilst studying for BA Politics and International Relations at the University of Cardiff, followed by an MA in Political Communication. Before joining TechRadar Pro as a Junior Writer, she worked for Future Publishing’s MVC content team, working with merchants and retailers to upload content.

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