You Do Not Hate The IRS Enough
The IRS has a powerful new weapon
The Internal Revenue Service, everyone’s favorite tax collector, is facing deep budget cuts — but don't get too excited. The agency has a bold new plan to audit more of the little people while hiring as few of them as possible.
The agency plans to replace the nearly 30,000 employees it lost to Trump administration cuts with a new army of auditors, one that doesn’t sleep. I’m talking about artificial intelligence, which the IRS has identified as a top priority in its new budget request.
Documents I obtained show that the IRS already has a powerful set of tools to force compliance, from undercover agents to wiretaps and other forms of electronic surveillance. The collaborates with ICE to monitor the travel of American citizens through. But now, thanks to AI, the IRS’s ultimate goal is for “minimal human contact,” as one document put it.
The centerpiece is Palantir software that allows IRS investigators and auditors to conduct "near real-time data analysis" through a custom tool called the “Selection and Analytic Platform,” or SNAP.
What that means in practice is that millions of middle-income Americans who once fell below the threshold of what scarce human auditors could manage are now within reach. The little guy just became a lot easier to monitor at scale.
The big guy? Not so much.
The budget cuts gutting the IRS's human workforce were largely engineered by Elon Musk and his DOGE crusade. The beneficiaries are obvious: billionaires who use entirely legal means — offshore trusts, shell companies — to pay little or nothing in taxes. These structures are largely impervious to the IRS’s tools, AI or otherwise. Your cash tips and side hustles are not.
Happy Tax Day!
— Edited by William M. Arkin
It’s already impossible to talk to a person at the IRS. My friend is handling her father’s estate and found issues with several of his past tax returns resulting in the IRS owing the estate more than $200k. She got a tax attorney and started contacting them over a year ago. Her attorney has gone through various letters and other standard procedures and they will not ever respond in any way. If he requests a callback and gets one there’s a bot on the other end. The state is sending nastygrams about why the estate can’t be closed out after so long, because they can’t close it until these tax returns are resolved and refunded. If we’re required to pay taxes, the entity administrating them must be functional - this is simply sabotage.
I was recently audited for a three-year-old return, which flummoxed my accountant because they don’t typically go back that far. He told me to send the IRS a check for $1000 as an indication that I was dealing in good faith. We both scoured my numbers, and I discovered a political donation I had written off as charity. So I owed the government $.31. My accountant sent them a large packet of paper because the IRS apparently has an aversion to paper. Three weeks later, I received from the IRS a check for $1000 and a letter that read, “Due to time and personnel constraints, we cannot audit your return at this time”. I have a fear of this happening again. But why do we allow them to put the fear of God in us?