The IRS Workforce is Down 25%. AI Will Make Collections More Efficient Than Ever
Clients think the IRS is “understaffed,” so enforcement must be slowing down.
Which isn't unreasonable.
Headlines focused on budget cuts, layoffs, retirements and political fighting over IRS funding. 25% of IRS personnel were let go or retired in 2025.
The headlines, though, miss the forest for the trees. What's actually happening looks more like this: fewer humans, more machines, and an AI collection funnel that's more efficient than ever.
Despite fewer people working for the IRS, I had more individuals and business owners contact me regarding tax debt issues this year than in any year since before the pandemic.
Let’s talk about three things that I think will define IRS collections in 2026 and what it means for your clients.
1) IRS Collection: AI Creates an Automated Collections Funnel
The biggest changes happen within the Automated Collection System (ACS)—the notice-and-callsite collection machine the IRS uses to work huge volumes of cases.
As AI continues to improve, a collection funnel begins to emerge, which is able to:
Identify accounts likely to pay
Nudge taxpayers with escalating notices
Apply enforcement when the system doesn't get a response, and
Push the most complex cases into specialized channels
Collections become more scalable, even if staffing is low.
2) AI won’t replace collections but it will accelerate decision-making
The IRS has been openly reevaluating modernizing technology around AI. Reuters reported the IRS took a “strategic pause” on some tech modernization investments specifically to reassess because of emerging AI capabilities, with AI expected to improve collections and service.
When collections is slow, it's because decision-making requires a human being to make a decision before moving to the next step. AI makes decisions without human input, which allows collections to move more quickly:
Who gets flagged
Who gets notices
Who gets escalated
Who gets routed to enforcement
Who gets ignored (for now)
And AI doesn’t need to “be perfect” to change the game. It just needs to be good enough to make decisions faster than humans can.
3) The clients who suffer most will be the ones who are “kind of handling it.”
These are the people who:
Made one payment but not the next
Promised they’d “set up a plan soon”
Opened a notice and then… didn’t
In the current human-driven system, a client may drift for months without facing any consequences.
In an AI-driven automated funnel, procrastination will become an easy trigger, and taxpayers will feel the brunt of it.
TL;DR
⏩ Funding debates may reduce staffing growth, but that doesn’t mean softer enforcement.
⏩ ACS leans into a scalable collections funnel.
⏩ AI will speed up sorting, routing, and escalation—even if it doesn’t “replace” people.
⏩ The riskiest clients are the “kind of handling it” ones—because automation hates when you don't follow the rules.
➥ Contact Attorney Stephen A. Weisberg for a free Tax Debt Analysis.
Contact Me Here: https://www.weisberg.tax/contact-1
Email: sweisberg@wtaxattorney.com
Phone/Text: (248) 971-0885
Address: 300 Galleria Officentre, Suite 402, Southfield, MI 48034
