Sponsors (4)
The bill pilots AI to detect improper tax refunds and improve fairness—potentially saving taxpayer money—while raising significant privacy, accuracy (false-positive), administrative, and implementation-cost risks for filers and small preparers.
Taxpayers: A targeted AI pilot could identify fraud and reduce improper refunds, potentially saving taxpayer dollars and lowering the deficit.
Honest filers (including low-income taxpayers): Better detection of abusive claims can promote fairness so compliant taxpayers are less likely to shoulder the costs of fraud.
Taxpayers/Congress: Requiring a GAO report on AI accuracy and aggregate recoveries increases government oversight and provides evidence to inform future policy decisions.
Taxpayers (especially low-income filers): Using AI to flag returns risks false positives that could produce incorrect assessments or delays for filers.
Taxpayers: Automated analysis of sensitive tax data raises privacy and surveillance concerns about how personal information is processed and protected.
Third-party preparers and small businesses: Increased scrutiny from AI-flagged returns could create administrative and compliance burdens for preparers and small firms.
Based on analysis of 2 sections of legislative text.
Treasury must run a time-limited AI pilot to detect inaccurate or fraudulent tax returns and require a GAO report on detected fraud, recoveries, and AI accuracy.
Official title: To require the Comptroller General to submit a report to the appropriate committees of Congress on the potential of artificial intelligence to assist the Internal Revenue Service in detecting tax fraud.
Introduced June 29, 2026 by Vernon G. Buchanan · Last progress June 29, 2026
Requires the Treasury Secretary to set up a pilot program using artificial intelligence to detect inaccurate or fraudulent tax returns, including identity-theft returns, improper credit/deduction/refund claims, and returns prepared by improperly identified third parties. The pilot must begin within 180 days, run between 18 months and 2 years, and be followed by a Comptroller General report on fraud detected, recoveries, and AI accuracy. The bill creates a time-limited demonstration to test AI tools for improving detection and recovery of improper refunds or reduced tax liabilities, and it mandates independent evaluation of outcomes and tool accuracy for congressional oversight.