IRS

The Internal Revenue Service is the US federal agency responsible for administering tax law and collecting federal income taxes. For AI governance, the IRS matters because it sets tax treatment rules for AI-related expenses, deductions, and capitalization requirements that affect how organizations account for AI investments and can significantly impact their tax liability and financial reporting.

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EnforcementUS2026-09-29

IRS Deployed High-Impact AI With No Testing Records in 80% of Cases

The Treasury Inspector General for Tax Administration (TIGTA) found that four of five high-impact IRS AI use cases had no testing documentation. This was true even though data quality checks were being performed. TIGTA concluded this creates undetectable risk of inaccurate, biased, or unreliable AI outputs. IRS management agreed to standardize procedures and complete AI impact assessments for deployed systems by November 2026.

IRS federal AI compliance AI use case inventory data quality documentation OMB requirements TIGTA AI impact assessment audit readiness