IRS CEO Frames Agency as ‘Largest Business in the World’

The Internal Revenue Service is aligning its approach to IT modernization through a commercial business lens, IRS officials said this month.

“I think of IRS as the largest business in the world, with $5.4 trillion in revenue. You’re not going to find another business with more than 95% of the revenue of the country, and doing that really, really well for 170 million tax returns is important,” IRS CEO Frank Bisignano said earlier this month at the Government Service Delivery Conference in Washington.

Bisignano said people often view modernization as simply upgrading hardware, “but if you haven’t really changed the client experience, you haven’t really changed the employee experience, you haven’t changed the environment where you’re operating as a private company.”

Bisignano said he wants to improve the taxpayer experience through better services.

“We should be able to tell you, ‘You know what, you actually owe us more money,’ at the inception,” he said, adding that processes should be in place to make correcting mistakes and contacting tax officials more intuitive and easier.

The IRS already has a solid technology foundation to deliver those future services.

Digital IRS

The agency has approached new technologies and processes with a mindset of making tax filing easier and more efficient.

Electronic filing was a novel concept when it was first introduced, said IRS CIO Kaschit Pandya, noting that 98% of tax forms were submitted electronically during this filing season.

“When we think about our vision, we’ve made significant progress, and it’s really all about meeting our customers where they want us to be,” Pandya said.

Another digital service is the Where’s My Refund? tool, which Pandya said is the most popular application on the IRS website. More than 400 million inquiries were made through the tool during the most recent filing season. Because of its popularity, the IRS has continued to improve the application, he said.

The first stage of the IRS’s modernization effort focused on providing taxpayers and businesses with improved access to services and capabilities. The next step is enabling users to become more self-sufficient.

“It’s no longer about just being able to see the status, it’s about being able to act on the status. If the requirement is they [taxpayers] need to take an action, we want to make sure that we can provide that action option for them,” said Pandya.

As an example, Pandya noted that many people’s first instinct when interacting with a company is no longer to call or visit a physical location but to go online.

“That is our vision for the Digital IRS: meet taxpayers where they want us to be, and where they want us to be is in the digital channel space,” he said.

Focus on Service

The IRS operates three primary portals supporting individual taxpayers, businesses and tax professionals.

From the 2025 to 2026 filing seasons, use of the individual taxpayer portal increased by more than 33%, while use of the business tax account portal rose 58%, Pandya said. Usage of the tax professional portal doubled during the same period, while payments through the portal increased 138%.

Another area of improvement was phone service. Previously, taxpayers who remained on hold for too long were automatically disconnected. This year, the IRS introduced a callback option that allows taxpayers to request a return call from customer service.

Pandya said the change resulted in a 57% increase in customers choosing live-agent assistance because they were guaranteed a callback.

“I think what it reflects and highlights is that our taxpayers really want these options and access to the IRS,” Pandya said.

Future of AI at IRS

The IRS has been using AI long before it was widely referred to as AI, Bisignano said. While the concept may make some people nervous, “we live with AI every day,” he said, adding that the technology is mission-critical to the agency.

AI is also a powerful tool for taxpayers and tax preparers, he said. It can help identify anomalies and mistakes on tax returns, while the IRS can use AI and other digital tools to guide taxpayers and preparers toward better outcomes.

“We’ll use it [AI] on the back end, use it in call centers, and use it for client solutions. It’s just modern technology,” Bisignano said.