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Now, moving along, if you are anything like me, then you absolutely dislike paying taxes. Especially in a year where all these different Medicare, Medicaid, ebt, Hospice, Learning center, autism related fraud was uncovered. It's hard to feel enthusiastic about giving the federal government any of my money. And they know that. Evidenced by the fact that the IRS recently launched a pilot program in which they're using Palantir AI technology to help them figure out who needs to be audited. Meaning that as fun as it was in previous years to pay taxes and then have some federal bureaucrat decide whether or not you deserve an audit moving forward, it'll actually be decided by an AI machine, sort of like a tax GPT, if you will. Now, to be fair, even though it is getting implemented right now, the this isn't actually anything new. The first announcement warning Americans of the IRS using AI, it came out all the way back in the year 2023. That was when the then commissioner of the IRS, Mr. Danny Werfel, said the following as a part of a statement quote, there's a sea change taking place at the IRS in every aspect of our operations. The changes will be driven with the help of improved technology as well as artificial intelligence that will help IRS compliance teams better detect cheating, identify emerging compliance threats, and improve case selection tools to avoid burdening taxpayers with needless no change audits. Now, this shift towards AI, it requires a bit of background as well as it requires you to smash those like and subscribe buttons, Please, so this YouTube video can be picked up by the algorithm and shared out to ever more people on this platform. Thank you so much for that. And with that caveat out of the way, this shift to AI or AI based tax compliance, it comes as a direct result of the Inflation Reduction act that was signed by Joe Biden and law back in the year 2022. Included in that particular law, there was around $80 billion earmarked to expand the IRS's budget over the next 10 years. Now there were the debt ceiling negotiations between Joe Biden and Kevin McCarthy and those that $80 billion earmark was actually pared down to 60 billion and so basically 20 billion less. But that still left $60 billion for the IRS to play with. And while many people assume that this would fund a small army of IRS enforcement agents, it appears that a large chunk of this money was actually being funneled into ramping up the use of technology to collect taxes. In fact, the IRS released this document right here In April of 2023, shortly after the Inflation Reduction act was signed into law. Wherein they essentially outline what they're going to be doing with the money that's coming to them from that law. And this document, by the way, it was fairly long, it was 150 pages. And in it they referenced the fact that a large part of the that's being pumped into the IRS is going to be used to give them basically a technological facelift, or as the agency referred to it, quote, cutting edge technology, data and analytics to operate more effectively. Now, in this plan, the IRS focused mostly on customer service aspects of the technology boost. Things like adding chatbots, different online portals, as well as automated responses to different types of queries. However, just from my own personal experience, I'll say this is not going that well for them. I called the IRS in a personal capacity just a few days ago because I needed to talk about something and I was put on the typical two hour long hold, which has been pretty much standard fare ever since I remember paying taxes. And so these 2023 changes to user experience, at least from my perspective, have not made the experience that much better. Regardless, though, aside the money that was earmarked to be spent on this user experience, another portion of the money was to be used by the IRS to invest in technology driven enforcement to boost collections as well as government revenue. And so this again was announced all the way back in the year 2023 and just now in 2026, we're beginning to see the execution of this plan come to fruition. According to the irs, they will now begin to use AI tools to crack down on American taxpayers through a pilot program using a Palantir tool called snap, which is an acronym standing for the Selection and Analytic Platform. Quote. While the IRS is still a relatively large agency, the number of tax returns it must process every year is staggering. In addition, the IRS has significantly fewer employees than a decade ago, particularly in enforcement roles like revenue agents. The IRS has never been able to audit all tax returns with potential issues. And its workforce reduction has led to audits at near historic lows. That's where AI and Palantir come in. Now, the IRS estimates that Americans pay something like 85% of the total taxes that they owe, with the difference between what is owed and what is paid known as the tax gap. And in terms of how much money this gap represents? Well, according to other IRS estimates for the year 2022, the annual tax gap was around $696 billion. That's almost $700 billion per year that the federal government misses out on. And in order to try and claw back that Money the IRS will now be feeding into their AI tool your submitted tax forms, like your 1099s, your 1040s, your W2s, and so on. And then the system, the AI bot will compare that data to data coming from three other sources. The first is your previous tax returns in order to establish patterns. The second is publicly available data. And so, for instance, if you have a music band, they can scan your social media accounts, see how many concerts you're playing every single year, and compare that to your stated income to see whether it lines up or not. And then thirdly, the IRS can purchase third party data about you from different data brokers. All this data will then be fed into the Palantir SNAP tools to find patterns and things that might not add up. Here's how the former IRS commissioner explained it. Quote, Imagine an IRS employee sitting down to play chess against a potential tax evader. And now suddenly you have IBM Watson on your side telling you exactly how to play the chess game. That's what AI does. It provides the IRS personnel with a much more sophisticated way of seeing the evasion in ways they couldn't see it before. And for the irs, this change actually comes at the most opportune time, which is fairly ironic if you think about it, because if you remember, these tools are going online just as the IRS has become significantly understaffed. And the reason why it became understaffed, if you remember, is that a few years ago, there was significant pushback when the Biden administration announced that they would be adding something like tens of thousands of new IRS agents to the agency. And that pushback proved fairly successful, evidenced by the fact that after Trump was elected, within just a few months, close to a third of tax auditors which were let go from their jobs. And many people celebrated that fact. However, it appears that those jobs disappeared, only to be replaced by AI. According to this report that you can see up on your screen here from the Government Accountability Office, the project is in full swing. Quote the IRS had 126 active artificial intelligence use cases, applications of AI for a particular business need, in its inventory as of June 2025. These 126 use cases included 65 that were either too sensitive for public reporting or research and development efforts exempt from public reporting. That same report, by the way, contained this graphic here showing how AI will actually work in the auditing process pipeline. The graphic shows how returns get fed through an AI tool which is trained on historical audit data. It then assesses which returns might be fraudulent or not fully compliant, and that then gives each return a certain risk score, and then a human at the end of that pipeline reviews the work and decides whether or not you get audit. And if the chess analogy holds here, then we can assume that the AI will probably be very good and very efficient at spotting anomalies in the returns, which obviously has people worried about an uptick in audits in the coming future. Which, by the way, would be a huge change to the trend that we've been seeing in the last couple of years of audits really going down year after year. Quote, audits are one way the severely underfunded IRS can claw back money, but the rate of audits has slipped. According to the Taxpayer Advocate Service, The IRS opened 205,000 audits in fiscal year 2025, down from 335,000 audits in 2024. For comparison, the agency was auditing over 1 million returns a year as recently as 2017. And what might happen in the next few years is that that pendulum might swing violently back in the other direction. However, at the moment, we don't know. We'll have to wait and see what ultimately comes from this pilot program with the Palantir SNAP tool. But really, whether or not that particular Palantir tool will be adopted, it looks like unless some unforeseeable change comes our way in the next few weeks, months, or years, AI will be an integral part of most things, including taxes. And so once we file our taxes, we can expect within the next decade the IRS will be using some tool, whether it's Palantir or not, to scan them in the near future. Which is again, ironic because it seemed like the implementation of this AI is getting fast tracked. And to deal with the understaffing issue, people voted to reduce the number of IRS agents, only to perhaps finding themselves staring at an army of AI IRS agents who don't sleep or take breaks. If you want to go deeper into what's publicly known right now about the IRS's current AI setup, I will throw a link to the PDF version of that Government Accountability Office report. You'll be able to find it down in the description box below. It's pretty good. It goes through all the different use cases that are allowed to be shared to the public, and it kind of references the ones that aren't for some reason allowed. But it's good to know about both and then, yeah, otherwise, if you haven't smashed those like and subscribe buttons, please do so now. That way the video can be reached by ever more people. And then until next time, I'M your host, Roman from the epoch times. Stay informed. Most importantly, stay free.