The IRS has paused its artificial intelligence (AI) modernization efforts, potentially impacting tax refund processing times and taxpayer services. Here's what you need to know:

Key Changes and Impacts:

• AI processing pause for tax returns and fraud detection
• Possible return to manual processing, which may cause delays
• Planned closure of numerous IRS offices nationwide
• Reduced in-person services for taxpayers
• Leadership changes, including the demotion of acting chief counsel William Paul

Department of Government Efficiency (DOGE) Involvement:

• Led by Elon Musk
• Seeking access to taxpayer data for federal benefits and immigration purposes
• Working to reduce federal office leases
• Privacy concerns raised by legal experts

Available Filing Options:

• Direct File system remains operational
• IRS Free File still available
• Electronic filing with direct deposit recommended for fastest refunds

While the IRS maintains that refunds will be processed on schedule, taxpayers should prepare for potential delays and reduced service availability. Electronic filing and direct deposit remain the most efficient ways to receive refunds during this transition period.

Treasury Secretary Scott Bessent continues to support AI implementation for tax services, but the timeline for resuming modernization efforts remains unclear. Taxpayers should monitor IRS announcements for updates on processing times and office availability.

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