GAO Says That as of June 2025 the IRS Lacked a Comprehensive Quality Assurance Process for Its AI Inventory

The US Government Accountability Office was asked to review the Internal Revenue Service's use of AI. Its report to congressional requesters, GAO-26-107522, dated March 2026, assesses three things: how the IRS uses AI and how changes in its resources could affect that work, the quality of the information in its inventory of AI uses, and how it manages what it spends on AI. GAO makes eight recommendations, and the IRS agreed with all eight. Parts of the report follow, not the whole.

What the IRS Uses AI For

As of June 2025 the IRS had 126 active AI use cases in its inventory, each an application of AI "for a particular business need." Of these, 65 were either too sensitive for public reporting or research and development efforts exempt from it. The IRS reported 10 use cases in August 2022, and GAO says its inventory "has grown rapidly" since. The IRS categorized most of the 126 as improving either operational efficiency or tax compliance and fraud detection, and listed 77 as in development.

GAO says the compliance and fraud use cases were often designed to analyze high volumes of data, such as tax returns, and to identify the riskiest cases or anomalies. "In most cases, the AI provides a risk score or recommendation for audit or investigation. Then, an IRS official reviews the output and decides whether to pursue the audit or investigation."

Staff, Skills and the Data Models Learn From

"Major staffing reductions at IRS in 2025 could greatly affect its ability to use AI," GAO says. Officials in the IRS's research and analytics unit said it lost 63 employees who had supported AI work, and the team set up in 2024 to help the agency meet federal requirements on AI said it lost over three-quarters of its staff. Officials still said the agency plans to use more AI. But they had not identified the skills needed to support it, or a plan to close the gaps, and GAO says that together these "increase the risk that IRS AI efforts will not succeed."

Some effects reach the models themselves. One official said the agency may no longer deploy an AI model that prioritizes tax returns for audit, because the program may no longer have the staff to conduct the audits. In the long term, officials said, fewer enforcement staff will mean fewer audits and less data on audit outcomes, so the IRS "may not have sufficient data to reliably train new AI models or retrain existing models when needed."

The officials' concern runs in a circle. Fewer staff may mean fewer audits, less data on their outcomes, and models less able to choose the next audits.

What the Inventory Missed

Federal law and an executive order require agencies to keep an inventory of current and planned AI uses and to report it publicly each year. GAO found 62 entries in the IRS's June 2025 inventory with at least one quality issue. Over 25 percent of use cases did not state how they were expected to benefit the agency. Some did not give their status, and some did not list every business unit involved.

"As of June 2025, IRS did not have a comprehensive quality assurance process for ensuring completeness and accuracy of entries in the AI inventory," GAO says. The IRS had introduced quality reviews in 2024, but "in early 2025, IRS suspended its quality assurance reviews" because of staff reductions on the team responsible. Officials said they would like to add more checks, "but they did not have resources to do so."

GAO also found omissions. The IRS's Criminal Investigation unit has several AI-enabled tools, which officials said are contracted, that "help to gather online information to build criminal cases." As of June 2025 they were not in the inventory. Officials said the 2024 federal requirements were unclear about commercial AI tools, that the 2025 requirements were clearer, and that they planned to submit seven more use cases. They also said they might have left some out because including them would have revealed information to those outside law enforcement. GAO recommends that the IRS make clear in its internal communications that all unclassified AI use cases, "including contracted and sensitive law enforcement AI," are subject to the inventory requirements, "with limited exceptions."