IRS automates legal guidance with new AI tools

In recent months, Professors Joshua Blank and Leigh Osofsky have examined automated tools implemented by the IRS and other federal agencies to offer legal guidance to the public, particularly focusing on the use of chatbots. Their research included a detailed review of how these systems, such as the IRS's Interactive Tax Assistant, respond to taxpayers' inquiries regarding their tax obligations, showcasing an increasing reliance on digital assistance in government services. The Interactive Tax Assistant serves users by answering a variety of questions, including whether individuals need to file tax returns, demonstrating a significant shift to fast, automated responses as a means to enhance public service. Despite the benefits, the professors highlight inherent challenges associated with the reliance on such automated guidance systems. Many users of these chatbots may not fully grasp the complexities of the law, leading to potential misunderstandings or misapplications of tax regulations. The authors express concern about the shortcomings of these tools, particularly the lack of clarity regarding their limitations and the nuances of formal law. The Treasury's inclination to prioritize informal interpretations through these automated channels raises questions about the legal implications of users relying on such advice without formal oversight or accountability. The professors also advocate for the need for greater transparency in how automated tools operate, especially in cases involving uncertain areas of law. They suggest that it is vital for the IRS and other agencies to disclose the reasoning behind the advice given by chatbots, particularly when ambiguities are present. This transparency could help users assess the validity and applicability of the provided information, ultimately reducing the risk of relying on overly simplified or potentially incorrect guidance. Moving forward, the authors suggest that automated guidance tools will continue to evolve, potentially shifting from simply answering questions to facilitating compliance with tax regulations. They argue that while chatbots like the Interactive Tax Assistant streamline the interaction between agencies and the public, continuous assessments and improvements to these systems are necessary to ensure they adequately reflect the complexities of the law and properly serve the public's need for reliable guidance.