The Internal Revenue Service (IRS) has found itself at a crossroads, balancing the promise of new technologies with the enduring need for human oversight and public trust. In a series of statements made on May 5, 2026, IRS Director Vincenzo Carbone made it clear that artificial intelligence (AI) will never be used to make tax assessments. Instead, Carbone emphasized, there will always be an official—an actual person—who evaluates any data obtained with the help of AI. This stance comes amid growing debates about the role of technology in government and the recent adoption of internal guidelines following the passage of the AI Act.
“The Agency will never issue an assessment notice drawn up by artificial intelligence, this must never, ever happen,” Carbone declared during an online forum organized by the Ansa agency, as reported by Il Sole 24 Ore. “And if someone should be responsible for such an action, they will be held accountable.” Carbone’s words were forceful, aiming to reassure both taxpayers and IRS employees that human judgment remains central to the agency’s mission.
But Carbone’s message wasn’t a blanket rejection of AI. Far from it. The IRS has already begun leveraging artificial intelligence to speed up tax refunds—a move that’s showing tangible results. Refund processing times have dropped from 75 to 68 days, and the agency hopes to reach a target of 67 days by 2027. According to Carbone, “In reimbursement, artificial intelligence helps us, because it allows us to analyze different data in a very fast time and to reduce the time needed for disbursement. AI serves to improve the quality of our work, but it should not be the end result.”
It’s a nuanced approach: AI as an assistant, not a decision-maker. The distinction is critical, especially as the IRS launches new digital initiatives. One such project is the precompiled tax return, which has just been rolled out. In the first three days of its consultation period, the system logged a staggering 1.6 million accesses. Even more impressive, 80% of users opted for the simplified mode—up from 60% last year. The regions of Lombardy, Latium, Piedmont, and Veneto led the charge in early adoption.
This surge in digital engagement signals a shift in how Americans (and, in this case, Italians) interact with their tax authorities. The IRS is betting that streamlined, user-friendly tools will foster greater compliance and reduce friction. But Carbone is adamant: no matter how sophisticated the technology, “There will always be an official who, with his or her professional expertise, will evaluate the data we obtain with the use of artificial intelligence.”
Meanwhile, the IRS faces a daunting fiscal reality. On May 4, 2026, the agency reported that in 2022, taxpayers paid only $7 out of every $8 they owed, resulting in a tax gap that neared $700 billion. That’s a massive shortfall, threatening government budgets and public services. The IRS did manage to claw back about $90 billion of the missing revenue, but the gap remains a stubborn problem.
According to The Washington Post, the “tax gap” is the difference between what taxpayers owe and what they actually pay. While the IRS measures this gap at the federal level, many states don’t even attempt to estimate their own. The reasons are understandable—measuring the tax gap is complicated and expensive. But some experts believe that ignoring the problem could be even costlier in the long run.
Josh Goodman, a senior officer at the Pew Charitable Trusts who studies state fiscal policy, told The Washington Post, “If instead governments could collect more of what they’re already owed, they’d have money to spend on their priorities, they could avoid some of those unpleasant choices. But the starting point of that is really figuring out how big of a problem it actually is.”
Goodman’s point is especially relevant as states grapple with tough budget decisions. Some are considering raising taxes or cutting services—moves that are rarely popular. But by investing in better measurement and collection efforts, states might sidestep those painful options. The logic is straightforward: before you raise taxes or slash spending, make sure you’re collecting what’s already due.
Back at the federal level, Carbone and his team are also looking for ways to speed up and simplify tax compliance for those who play by the rules. For compliant taxpayers—like those participating in cooperative compliance programs or those with high tax scorecards—the IRS is already moving to reduce assessment deadlines. “The path has already been set in motion and the reduction will certainly be achieved, because I believe it is a matter of legal civilisation,” Carbone explained. “We cannot think that after five years we arrive and go and ask for data, information or feedback from a taxpayer who has perhaps also changed his business over time.”
This push for efficiency is coupled with a broader goal: reducing litigation. Carbone is candid about the agency’s philosophy. “Going to litigation with the taxpayer is a defeat. We have the data, we can talk beforehand, we can ask the taxpayer for the necessary information to make his position better represented. Going to litigation is a defeat. It means that we were not good.” It’s a refreshingly honest admission and a sign that the IRS is trying to shift from an adversarial approach to one rooted in dialogue and trust.
Of course, not everyone is convinced that technology—no matter how carefully managed—can solve the IRS’s challenges. Critics worry about privacy, algorithmic bias, and the risk of overreliance on data-driven tools. But Carbone’s insistence on human oversight is meant to address those fears head-on. By keeping people in the loop, the IRS hopes to avoid the pitfalls that have plagued other government agencies experimenting with automation.
For now, the IRS’s approach is a study in contrasts: embracing innovation, but drawing clear lines around its use; pushing for efficiency, but refusing to sacrifice accountability; seeking to close the tax gap, but emphasizing cooperation over confrontation. Whether these efforts will be enough to rebuild public trust and shore up government finances remains to be seen. But one thing is clear—the IRS is trying to chart a new course, one that blends the best of technology with the irreplaceable value of human judgment.
As the agency continues its transformation, taxpayers, policymakers, and experts alike will be watching closely. The stakes—hundreds of billions of dollars and the credibility of the tax system itself—could not be higher.