IRS applies AI to select large partnerships for examination

AI system

System: IRS AI and machine-learning case-selection models (two partnership prioritization models; a refundable-credit audit selection model in pilot; machine learning for partnership, income and international tax risk)
Model: The Large Partnership Compliance model for tax year 2021.
Release: Exact release not established.
Application developer: Internal Revenue Service (in-house data scientists with tax-enforcement experts)
Role: The models prioritized tax returns for human examiners.
Configuration: The IRS used its Large Partnership Compliance model for tax year 2021.
Inputs and outputs: Not assessed
Autonomy: Not assessed
Workflow: Inflation Reduction Act funding for IRS compliance work. Collaboration between IRS data scientists and tax-enforcement experts. Partnership return data for the Large Partnership Compliance program launched in 2021.
Human oversight: Not assessed
Relation to AI: The models prioritize or select returns for human examiners. Examinations and any assessments are human decisions. The IRS release is the deployer's own account of a system it builds in-house. The GAO post is an independent government source that relays IRS officials' claims about the pilot model and adds caveats. Neither reports an outcome attributable to the AI.
AI contribution: The models prioritize or select returns for human examiners. Examinations and any assessments are human decisions. The IRS release is the deployer's own account of a system it builds in-house. The GAO post is an independent government source that relays IRS officials' claims about the pilot model and adds caveats. Neither reports an outcome attributable to the AI.

Benefits

Outcome identifiers: Not assessed
Benefit: IRS (8 September 2023): AI to help detect cheating and select cases; exams planned for 75 partnerships averaging over $10bn in assets. GAO (Jun 2024): two AI models prioritize partnership audits.
Category: Improved Organizational Efficiency
Status: Not assessed
Beneficiary groups: People. Organizations. Society.
Beneficiaries: Not assessed
Reach: Not assessed
Distribution and access: Not assessed
Duration: Not assessed
Expected?: Yes
Costs and harms: Not assessed

Measurement

Studies: Not assessed
Study design: Not assessed
Measurement: Not assessed
Setting and sample: Not assessed
Measures: Not assessed
Comparison: Not assessed
Results: Not assessed
Additional value from AI: Not assessed
Limitations: Not assessed
Denominators: Not assessed
Materials for replication: Not assessed

Money

Kind of value: additional tax assessments yearly that IRS management estimates from reassigning 14 classifiers to examinations after the Form 1040 return classification AI model automated classification (an SB/SE individual-return model, not the partnership models)
Amount: Estimate: approximately $26.1 million
Currency and prices: Not assessed
Period and unit: Not assessed
Realization: Not assessed
Recipients and payers: the Internal Revenue Service (U.S. Treasury)
Gross or net: Not assessed
Included costs: Not assessed
Comparison: Not assessed
Method: Not assessed
Return and payback: Not assessed

People and places

Participants: Developer: Internal Revenue Service (in-house data scientists with tax-enforcement experts). Operator: Internal Revenue Service.
Jurisdictions: Benefit: United States (national). Developer: United States. Operator: United States.
Ownership and control: Not assessed
Dependencies: Not assessed
Cross-border connections: Not assessed
Geopolitical implications: Not assessed

Follow-up

Conditions for replication: Sustained funding and staffing for the examinations the models select. Documentation of the models, which GAO found lacking in 2024. Correction of the design weaknesses GAO said may limit objective identification of high-risk returns.
Replication attempts: Not assessed
Later findings: 19 May 2025. TIGTA's May 2025 audit found the Large Partnership Compliance model still in production, with the first 82 high-risk TY 2021 returns under examination, no closed examination results yet, and uncertainty over reduced staffing after the end of the contractor's work.
Availability: Not assessed
Institutional decision: Not assessed
Grounds: Not assessed
Action and result: Not assessed
Success criterion: Not assessed

Evidence

Source numbers: AIBD-0338-source-0001–0005
Citations: Numbered references below.
Language: Not assessed
Source relationships: Developer, Independent
Original evidence: Not assessed
Access and versions: Not assessed
Supported findings: Not assessed
Evidence links: Not assessed
Evidence strength: Not assessed
Missing evidence: Not assessed

Grades

Assessed benefits: People. Organizations. Society.
Depth: Not assessed
Reasons: People: No individual outcome is documented. Organizations: The IRS gives no results from the AI-selected examinations and GAO reports only officials' pilot claims. Society: No revenue or fairness outcome is attributed to the models.
Observed or intended: Not assessed
Rubric: Not assessed
Assessor and date: Not assessed
Alternative assessments: Not assessed
Fill: Independently studied

Entry details

Kind: Not assessed
Related entries: Not assessed
Field: Public administration: tax enforcement. National revenue agency.
Purpose: Built to select high-risk returns for examination and to detect compliance threats. The claimed benefit is that purpose, with no attributable outcome documented.
Dates: Date basis unassessed: 2023 (precision unassessed). Updated: 21 October 2026.
Stage: Not assessed
Version: SHA-256: 60071e95f8b4…

References

Other identifiers: Not assessed
Category mappings: Not assessed
Brief: Not assessed
Revisions: 5 revisions. Latest: 21 October 2026.

Sources

Report Independent author

U.S. Government Accountability Office (2024). Artificial Intelligence May Help IRS Close the Tax Gap. GAO WatchBlog, 6 Jun 2024.
Report Independent author

Treasury Inspector General for Tax Administration (2025). The IRS Could Leverage Examination Results in Artificial Intelligence Examination Case Selection Models and Improve Processes to Evaluate Performance. Report 2025-308-022, 19 May 2025.
Press release Developer

Internal Revenue Service (2023). IRS announces sweeping effort to restore fairness to tax system with Inflation Reduction Act funding, new compliance efforts focused on increasing scrutiny on high-income, partnerships, corporations and promoters abusing tax rules. IR-2023-166, 8 Sep 2023.