If your tax refund hits a snag this spring, good luck reaching a person at the IRS. The agency that opened the 2025 filing season with roughly 102,000 employees finished the year with about 74,000, a 27% contraction that wiped out 28,000 positions in 12 months. The National Taxpayer Advocate’s Annual Report to Congress, delivered in January 2026, documented the decline and issued a blunt warning: taxpayers who run into problems during the 2026 filing season will have a much harder time getting help.
While the workforce shrank, the agency’s use of artificial intelligence surged. The Treasury Department’s official AI Use Case Inventory, updated in January 2026, lists 129 active AI use cases across Treasury and its component bureaus, with the IRS as the largest contributor. In 2022, that same inventory contained just 10 entries. The question for the millions of people expected to file returns this spring is not whether the IRS is betting on automation. It is whether that bet can cover a gap of 28,000 missing workers.
Where the cuts hit hardest
Most of the departures came early. A mid-year snapshot from the Taxpayer Advocate placed the IRS workforce below 76,000 by June 2025, meaning the bulk of the losses landed in the first two quarters. The damage was not spread evenly. IT staff, the people who maintain the systems that process electronic returns and run fraud filters, fell by roughly 27%. Taxpayer Services, the division that answers phones and staffs walk-in centers, shrank by about 22%. (Those percentages are drawn from the mid-year report’s division-level breakdowns, though readers should note the report presents staffing figures that require calculation against prior-year baselines.)
Those two divisions sit at opposite ends of every tax return. Taxpayer Services is where a filer calls when a refund stalls or a notice makes no sense. IT is where the digital plumbing lives. Losing more than a fifth of each division in under a year is not a budget trim. It is a structural shift in how the agency operates.
The Taxpayer Advocate’s annual report acknowledged that service held up during the 2025 filing season: phone wait times and processing speeds stayed within acceptable ranges. But the same report warned that 2026 would be different. The companion 2026 Purple Book, a set of legislative recommendations to Congress, flagged under-resourced call centers, constrained in-person assistance, and the risks of leaning on automated tools without strong safeguards in place.
129 AI use cases, but what do they actually do?
The Treasury AI Use Case Inventory is not a media estimate or a think-tank tally. It is the official federal record required under mandates dating to a 2019 executive order on AI leadership and the National AI Initiative Act. Every entry must be logged, assigned an owner, and reviewed under the IRS’s own AI Governance Policy, codified in Section 10.24.1 of the Internal Revenue Manual. That policy includes rules for suspending or terminating tools that fall out of compliance.
What the inventory does not publish is performance data. There are no public error rates, no accuracy benchmarks, and no outcome metrics attached to individual use cases. A supplemental Government Accountability Office report, identified internally as GAO-26-108418, reportedly provides a non-sensitive subset of IRS AI applications as of June 2025, but it covers only a filtered portion of the full list and could not be independently verified through GAO’s public catalog as of May 2026. Sensitive and law-enforcement-related tools are withheld from public view.
That gap matters. The public inventory does not break down which AI tools serve which IRS divisions. There is no way to determine how many of the 129 use cases target Taxpayer Services, the division that lost 22% of its staff, versus how many support enforcement audits or back-office operations. Without that detail, it is impossible to judge whether automation is being directed at the areas most affected by headcount losses. It is also unclear how many tools are fully operational systems touching live taxpayer data versus experimental pilots still in testing.
Direct File and the broader automation push
One of the most visible pieces of IRS automation is the Direct File program, a free, IRS-built online filing tool that launched as a limited pilot during the 2024 filing season and expanded to cover more states and tax situations for the 2025 season. Direct File lets eligible taxpayers prepare and submit federal returns without commercial software or paid preparers. The program’s future scope for the 2026 filing season remains uncertain amid the broader staffing and budget shifts, but its existence illustrates how the agency has been layering technology-driven services on top of a shrinking human workforce. Whether Direct File will expand further, hold steady, or contract is one of the open questions heading into spring 2026.
No official link between AI growth and staff cuts
No public statement from IRS leadership directly connects specific AI deployments to the workforce reduction or claims that automation is offsetting the loss of 28,000 employees. The Taxpayer Advocate’s reports describe the staffing decline and flag the risks ahead, but they do not include an IRS response explaining how, or whether, AI fills those gaps.
Whether the agency views the technology as a substitute for departed workers, a force multiplier for remaining staff, or simply a parallel modernization effort is not spelled out in any available primary document. No independent audit of AI accuracy or taxpayer outcomes has been published as of early 2026. That means outside observers cannot yet say, with data, whether AI-driven filters are catching more fraud, incorrectly flagging compliant returns, or simply shifting workloads from one part of the agency to another.
The IRS governance framework describes clear roles, inventories, and termination procedures on paper. But there is no public record showing how often tools have been suspended or modified because of bias, error, or unintended consequences. There is no public dashboard tying AI deployments to service metrics like call resolution times, correspondence backlogs, or audit selection accuracy. Until those links are documented, any claim that AI is compensating for reduced staff remains an assumption, not a finding.
What filers should do differently this spring
For taxpayers filing during the 2026 season, the practical reality comes down to this: automated systems will handle more of the initial screening and routing of returns, while human support will be harder to reach when something goes wrong. That puts a premium on getting it right the first time. Filing a clean return, responding promptly to IRS notices, and keeping thorough records all reduce the odds of getting caught in an automated flag with no easy path to a human reviewer.
Taxpayers who need help have options beyond the IRS call center. Enrolled agents, CPAs, and other authorized preparers can use the agency’s Tax Pro online services to submit forms and track account issues on a client’s behalf. Low-income filers may qualify for assistance through volunteer tax preparation programs or Low Income Taxpayer Clinics, which can help resolve disputes that might otherwise stall in automated queues.
Filers handling their own returns should lean into digital channels: online account access, secure messaging where available, and electronic filing with direct deposit. These are among the areas where automation can genuinely speed routine processing. But anyone dealing with something that requires human judgment, such as identity theft disputes, innocent spouse relief claims, or multi-year audit questions, should expect slower resolution and plan accordingly.
The machines are multiplying, the people are not
The core facts are well established in official sources: a 27% drop in IRS staffing over a single year, a leap from 10 to 129 AI use cases across Treasury since 2022, solid service metrics in 2025, and a formal warning from the Taxpayer Advocate that 2026 will be harder. What is missing is the connective tissue. The IRS has not publicly explained how its AI expansion relates to its workforce contraction, and no independent body has published data showing whether the new automated infrastructure is performing at the level the agency needs.
Until that scorecard exists, taxpayers are filing into a system being rebuilt while it runs. The agency’s own watchdog has said as much. And the only real-time measure of whether the tradeoff is working will be the experience of the millions of filers who are, in effect, the test group.
