The IRS built its chatbot and live-chat programs to do something taxpayers have wanted for years: make it easier to resolve routine tax problems without having to sit on hold. But the agency can’t say that it’s working.
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IRS chatbots were supposed to reduce phone pressures. But the Treasury Inspector General for Tax Administration, or TIGTA, found the IRS cannot prove they work.
The IRS built its chatbot and live-chat programs to do something taxpayers have wanted for years: make it easier to resolve routine tax problems without having to sit on hold. But a recent TIGTA report says the agency expanded those tools before it had reliable data showing whether they were working, whether taxpayers were getting answers, or whether live chat was actually reducing pressure on IRS phone lines. The result is that taxpayers who came to the IRS website looking for help may have left needing to contact the IRS again.
Background
The IRS first piloted live chat in November 2017, expanded authenticated live chat in June 2019 (made permanent in June 2025), and added an automated ACS chatbot, available in English and Spanish, to offer preprogrammed responses for taxpayers in December 2021. (ACS stands for Automated Collection System, the IRS function that handles many inquiries involving balances due and delinquent returns.)
In January 2022, the IRS deployed an ACS unauthenticated voice bot that answers common questions (the authenticated voice bot was added in June 2022 and allowed taxpayers to create and manage installment agreements and make payments through self-service applications).
Authentication is important because, after identity verification, an IRS employee can answer account-specific questions and take actions such as helping taxpayers establish payment plans or obtain account information. Unauthenticated chat or bots, by contrast, are limited to general tax information.
The Taxpayer First Act, enacted in 2019, required the IRS to modernize, and that necessarily included expanded online services. Among other reforms, the law required the IRS to develop a strategy that included expanded online services, telephone callback options, and improved employee training. That was followed by the Inflation Reduction Act and its modernization plan, which also emphasized a reimagined taxpayer experience. The goal was to push routine questions away from the toll-free line and give taxpayers an easier, faster path to answers. And early signs were promising (you can read about my experience in 2023 here).
Data Reliability
As with any tech rollout, it’s important to measure the tool’s success. But the IRS didn’t analyze its chat applications or have meaningful performance measures. It did, however, keep reports. And when TIGTA reviewed ACS chat statistical reports from February 2023 through December 2024, it found outliers and discrepancies serious enough to call the reports’ reliability into question. How serious? One metric showed a live assistor handling as many as 603 live chats simultaneously, a figure the IRS agreed was wrong because the system was supposed to cap concurrent chats at three.
One of the issues may be a faulty handle time calculation. Handle time measures how long it takes a live assistor to service one chat. IRS IT officials told TIGTA the metric was being miscalculated, possibly because employees were not closing chats when they were completed. If a chat is left open, the system automatically closes it after four hours, which can inflate the metrics.
The IRS tried to fix the problem. In May 2025, the IRS implemented an alert for ACS team leads when a chat was left open for more than 60 minutes, but that didn’t solve the problem. As of December 2025, the IRS and its vendor were still working to identify the cause of the handle time calculation error.
Not having reliable data raises real issues. If the IRS can’t measure how long chats take, how many chats employees handle, or how often chats are resolved, it’s impossible to say that the system is saving time or reducing the need for telephone assistors.
Resolution Data Issues
When a chat session is over, the assistor is supposed to document the chat resolution by recording one of three codes: resolved or deflected, disconnected, or referred to ACS.
TIGTA found that resolution codes did not match the number of live chats. For calendar years 2023 and 2024, the reports showed 635,684 resolution codes but only 613,056 live chats, a difference of 22,628. TIGTA found that some live chats were closed without a resolution code, while others had multiple resolution codes. The IRS could not always answer what happened to the chat.
Overall, TIGTA identified 635,684 reported live chats, of which only 290,181, or 46%, were classified as resolved. The remaining 345,503, or 54%, were unresolved.
And those unresolved numbers are on the way up. TIGTA says the data shows that unresolved live chats rose from 119,184 in 2023 to 226,319 in 2024, an increase of roughly 90%. Abandoned chats jumped from 33,781 in 2023 to 103,057 in 2024, a 205% increase. Overall, abandoned chats accounted for 28% of unresolved chats in 2023, but 46% in 2024.
Notably, the IRS did not count abandoned chats in its performance analysis.
TIGTA also found that the IRS cannot determine why chats go unresolved because the reasons are not documented. If a live assistor refers someone to the ACS phone line, there’s no record of the reason. And, if a taxpayer abandons the chat, they are not asked for feedback.
Authentication Issues
Authenticated chats were supposed to be a way for taxpayers to reach actual resolutions, not just get generic IRS answers that they could find on Google. But that requires a level of security to confirm that the taxpayer is who they say they are. Initially, taxpayers could access authenticated live chat only if they selected the right chatbot prompts before reaching a live assistor. If they did not, they could not be authenticated during the chat.
In March 2025, the IRS began testing “midchat authentication,” which allowed an assistor to send a link so the taxpayer could verify identity after the chat began. But ACS management told TIGTA this could create a downtime issue because a live assistor may have to wait 15 to 20 minutes while the taxpayer creates an online account. To address the issue, the IRS added a chatbot notification in November 2025 telling taxpayers they need an active online account before a live assistor can provide account information, which isn’t a complete resolution.
Privacy Concerns
There are also a privacy and disclosure concerns. TIGTA reviewed a judgmental sample of 40 live assistors—meaning the auditors selected assistors based on risk indicators rather than at random— and found that 24, or 60%, worked multiple live chats concurrently. Of those 24, 12, or 50%, had at least one authenticated chat open while working another chat.
Authenticated chats involve taxpayer-specific information, which raises the risk of an inappropriate disclosure if an employee mixes up chat windows or sends information to the wrong taxpayer. Section 6103 strictly limits disclosure of tax return and return information, so this is also makes it a legal disclosure issue. (You can find out more about section 6103 here.)
ACS management told TIGTA there was a general understanding that employees working authenticated chats were allowed to work only one at a time. But during walkthroughs at two ACS locations, two assistors said they were allowed to work multiple chats concurrently, both authenticated and unauthenticated.
The IRS later told TIGTA that, in April 2025, the live-chat application was updated to allow only one chat at a time. Yet later reports for September through November 2025 still showed 181 records involving 23 live assistors potentially working between two and 11 chats at once. Because the handle-time metric remained faulty, the reports could not reliably confirm whether the new control was actually operating as intended.
Wrong or Incomplete Answers
TIGTA also tested the chatbot. In March 2025, auditors reviewed 206 process flows and found 29 responses, or 14%, that could be improved. Some responses sent taxpayers to broken hyperlinks. Others gave incomplete information, such as linking to a form without instructions on how to complete it.
TIGTA also tested 53 keyword terms and found that 44, or 83%, including “Debit Card” and “Tax Pro Account” were either not recognized or produced an insufficient response. In some cases, according to TIGTA, the chatbot returned computer programming code instead of a useful answer.
The Spanish-language chatbot had an additional problem. Unlike the English version, it did not allow taxpayers to type keywords or questions into a search box. Spanish-language users were limited to prepopulated options. TIGTA said both versions should be consistent.
Some those issues are directly related to technology. The automated chatbot provides responses based on pre-established topics and doesn’t use Generative Artificial Intelligence (AI). Since November 2024, the IRS’s Transformation & Strategy Office, IT, and various other business units were working to develop a long-term AI strategy, but in March 2025, the Transformation & Strategy Office was eliminated as part of the Department of Government Efficiency (DOGE) cuts. And, IRS officials told TIGTA that the AI strategy is on hold indefinitely due to changes in leadership at the Department of the Treasury and the IRS. Apparently, the Department of the Treasury will be developing a new AI strategy.
No Real Taxpayer Feedback
Since September 2022, the IRS has not offered a survey to taxpayers after they complete an ACS live chat session. But the IRS does offer a simple two-question survey when a taxpayer ends an automated chatbot session that has not been escalated to a live assistor.
The kicker? When TIGTA requested the results of the survey questions, IRS officials stated that they do not collect or review these responses.
Federal agencies are required to get direct feedback from customers, but TIGTA found that the IRS is not compliant with those requirements. It has not implemented surveys for live chats and does not review responses from existing surveys for automated chats.
Staffing and Funding
It takes money to make technology work. The IRS initially received approximately $79.4 billion in supplemental Inflation Reduction Act (IRA) funding in 2022, but by February 2026, Congress had pulled back that amount to approximately $26 billion. ACS management told TIGTA that in fiscal years 2024 and 2025, the IRS spent approximately $7.2 million of IRA funding to support IRS chatbot and live-chat applications.
Meanwhile, the IRS workforce shrank from approximately 103,000 employees in January 2025 to 77,000 in May 2025, a 25% drop. ACS live assistor staffing fell 20%, from 159 to 127 employees as of July 2025.
The goal of reducing employees was supposed to be right-sizing. Treasury insisted that the IRS could do more with less by relying on technology. But if fewer employees are available, digital options need to work better. A chatbot that fails to recognize common tax terms doesn’t fit the bill. And a taxpayer who starts with chat, gets disconnected or referred, and then calls the IRS has not been taken out of the phone hold queue. They’re going to the back of the line and they’ve just taken an extra step to get there.
TIGTA Recommendations
TIGTA made nine recommendations in its report, and the IRS agreed with all of them. The recommendations include better metrics, asking taxpayers for feedback (and then following up on that feedback), reviewing live assistors, and fixing broken or insufficient chatbot responses and keyword recognition.
The IRS said it had already implemented some corrective actions, including guidance for managing ACS live chat and evaluative reviews for employees working live chats. Other targeted actions—like improving those metrics—are slated for a 2027 fix.
About TIGTA
TIGTA was established in January 1999 by the IRS Restructuring and Reform Act of 1998 to provide independent oversight of IRS activities. Today, TIGTA provides audit, investigative, and evaluation services to promote integrity, efficiency, and economy in the administration of the nation’s tax system. While TIGTA sits organizationally within the Department of the Treasury and reports to the Secretary of the Treasury and to Congress, the agency is considered to be independent.
You can read the TIGTA report here.
Read the full article here
