IRS Made Live Chat Permanent. It Never Tested Whether It Works.

The Treasury Inspector General for Tax Administration⧉ -- TIGTA, the independent watchdog Congress created specifically to audit the IRS -- found that IRS management "has not taken sufficient steps to evaluate the effectiveness" of its Automated Collection Service (ACS) chat applications.▸ Nevertheless, the IRS expanded the program and made its live-chat pilot permanent in June 2025. Nobody can say the expansion worked: of 635,684 live chats the IRS's own statistical reports logged in Calendar Years 2023 and 2024, 345,503 -- 54% -- went unresolved, meaning the taxpayer never got an answer and had to start over or call the phone line the chat was supposed to relieve. Worse, TIGTA found the tracking data itself is broken -- one report showed a single employee handling 603 live chats at the same time, a physical impossibility the IRS's own system is supposed to prevent by capping concurrent chats at three.

The ACS function -- the IRS unit within Small Business/Self-Employed that chases balances due and delinquent returns -- began piloting live chat in November 2017 and added an automated chatbot in December 2021.▸ The 2019 Taxpayer First Act⧉ required the IRS to build a customer-service strategy meeting "taxpayers' reasonable expectations" and expand online services, and the agency's internal 2023 Customer Experience Action Plan credited live chat with "saving taxpayers' and employees' time." But TIGTA's review found the IRS never analyzed whether that claim -- or a related internal report crediting chatbots with reduced phone demand -- was actually true. The chat applications generate statistical reports on handle times, wait times, and concurrent-chat counts, but ACS management confirmed to auditors it has no performance measures and does not verify the reports' accuracy. The agency made the program permanent anyway.

Using the same statistical reports, TIGTA tallied what actually happened to the 635,684 live chats logged between February 2023 and December 2024: 290,181 (46%) were resolved -- the assistor addressed the inquiry or handed it to another IRS function -- and 345,503 (54%) were not.▸ The unresolved total breaks into three groups: 136,838 chats abandoned before a taxpayer reached an assistor, 127,288 disconnected mid-conversation, and 81,377 where the assistor gave up and referred the taxpayer back to the ACS phone line -- the very line chat was supposed to relieve. Unresolved chats also got worse over time: the count nearly doubled from 119,184 in Calendar Year 2023 to 226,319 in 2024. The IRS doesn't know why. It captures no reason code when a chat is abandoned, and when a taxpayer is bounced to the phone line, the assistor has no field to record why.

TIGTA's harder finding is that the reports used to judge the program can't be trusted.▸ Over 16,000 records showed a live assistor apparently handling more than one chat at a time -- normal, since assistors are allowed limited concurrency -- but 193 of those records showed someone working between 4 and 603 chats concurrently, against a system-enforced cap of 3. ACS management agreed the 603 figure was wrong. IRS technology officials traced the likely cause to a separate bug: the "handle time" metric -- how long an assistor spends per chat -- is miscalculated when a chat isn't manually closed, so it auto-closes after four hours and inflates the concurrency count. IT staff filed a vendor ticket in July 2025; as of December 2025, the root cause was still unresolved. A second discrepancy compounds it: the reports logged 635,684 resolution codes against only 613,056 actual live chats -- 22,628 more codes than chats, because assistors were closing chats with a blank code or multiple codes, and nobody investigated why.

The Inflation Reduction Act of 2022 appropriated $79.4 billion⧉ in supplemental IRS funding, of which the agency spent $7.2 million on chatbot and live-chat tools in Fiscal Years 2024 and 2025 combined.▸ Congress has since clawed back $53.5 billion of that appropriation across four laws -- $1.4 billion in 2023, $20.2 billion in 2024, another $20.2 billion in a 2025 continuing resolution, and $11.7 billion in the Consolidated Appropriations Act of 2026 -- leaving about $26 billion, roughly a third of the original sum. The staff running the program shrank alongside it: ACS's live-assistor corps fell 20%, from 159 to 127 employees, by July 2025, as the IRS's total workforce dropped 25%, from about 103,000 to 77,000, amid the administration's government-wide workforce reduction. A smaller staff working an unmeasured, glitch-tracked program means the IRS entered a period of reduced capacity with no baseline to know whether service held, degraded, or improved.

TIGTA sampled the transcripts of 40 live assistors and found 24 (60%) working multiple live chats at the same time; of those, 12 had at least one authenticated chat -- meaning the taxpayer's identity had been verified and their tax-account data was live on screen -- open while working another.▸ That matters because IRC Section 6103 makes it a federal offense to disclose one taxpayer's account information to a different taxpayer; working chats concurrently raises the odds of a mix-up. ACS management told auditors a control limits assistors to three concurrent chats, and separately said an April 2025 system update restricted authenticated work to one chat at a time. Field interviews contradicted both claims -- two assistors at two different sites said they believed they could work multiple chats, authenticated or not -- and the data backed the assistors: reports for September through November 2025, five months after the supposed fix, still showed 181 records where 23 assistors appeared to be running 2 to 11 concurrent chats.

TIGTA also tested the automated chatbot directly, walking through 206 process flows and typing 53 keyword searches a taxpayer might reasonably try.▸ Twenty-nine of the process-flow responses (14%) needed fixing -- some pointed to broken links, others handed over a form with no instructions for filling it out. Of the 53 keywords, 44 (83%) went unrecognized or drew an insufficient answer; "Debit Card" and "Tax Pro Account" just looped back to the same prepopulated menu, and some searches returned raw programming code instead of an answer. The Spanish-language chatbot doesn't even offer a keyword search box, limiting Spanish-speaking taxpayers to preset options English speakers can bypass. None of this uses generative AI -- the IRS's would-be AI strategy office was eliminated in March 2025, and the agency is waiting on a Treasury Department strategy with no timeline.

And no one is measuring taxpayer sentiment either way.▸ OMB Circular A-11 Section 280⧉ -- the governmentwide rule for how agencies must manage customer experience -- requires agencies to deploy a post-transaction survey for services like this one and act on the results, since the IRS itself designates the ACS chatbot and live chat as High Impact Service Provider offerings. The IRS has offered no live-chat survey since September 2022, and it doesn't review the responses to the two-question chatbot survey it does run.