When CX Becomes Taxing: How the IRS Can Level Up Customer Service


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With Tax Day fast approaching, many Americans are finding themselves on hold … waiting to speak with an IRS customer support agent. In a digital world where we are used to chatting with, texting or emailing customer support, the IRS is seriously lagging behind. Fortunately it’s aware there’s room for improvement– the agency has recently received $80 billion to overhaul its operations, including improving customer service. The new chief of the IRS, Janet Yellen, has made customer service a top priority. So, from a tech CX point of view, how can the IRS improve customer experience? Let’s start with getting taxpayers off hold.

Chatbots and AI

The implementation of smart chatbots and AI would allow the agency to retrieve information about tax returns, tax policy and other low-level inquiries that customers may have. By answering a few questions about themselves, customers could receive the information they need without having to wait on hold for long periods. The IRS can also use Robotic Process Automation (RPA) vendors to build basic bots that agents can trigger to automate mundane processes, while retaining human agency where nuance and human understanding is still required for problem-solving.

Conversational Engagement

Implementing conversational engagement can take CX to the next level. Using live chat channels and SMS can make the agency more approachable and easier to reach. Additionally, conversational engagement can make the IRS more responsive to highly emotional requests from taxpayers. Leveraging AI technology can assist agents dealing with irate customers in real-time through immediate guidance regarding best actions to take and phrasing recommendations. This same technology can also help ensure that agents are following appropriate legal and regulatory standards in their contacts with customers – even at scale. Conversational engagement also provides opportunities for more efficiency by empowering agents to handle multiple conversations simultaneously.

Quality Assurance

A strong quality assurance program that measures empathy and other soft-skill intangibles can also go a long way. The IRS is a monopoly, and typically, there is not much innovation in more qualitative, soft-skill areas. However, AI mentoring technology and other tools can help scale quality auditing, making it more possible than ever before. Since IRS contacts are likely to be bogged down by emotional situations, the challenge to customer support agents will be more significant than it would be for other companies. Implementing a quality assurance program can ensure that agents appropriately navigate complex policy-based questions and follow proper procedures. It will also help identify potentially problematic conversations for review and empower the building of quality scorecards.

Goal Setting

Setting tighter goals is another important aspect of improving CX, as these new CX strategies empower faster service for customers of the IRS than ever before. Companies with highly administrative, highly rules-based, highly repeatable, and highly mundane tasks like the IRS get the most results from chatbots, with increased deflection of low-level contacts. Moving to conversational channels could change the majority of agents from handling one conversation at a time to multiple conversations at a time, potentially reducing resolution time by hours. Switching to conversational channels and speeding up response times is associated with higher satisfaction.

Multiple Communication Channels

As said earlier, we’re used to simply chatting, texting or emailing for customer support. Since customers want to communicate on their channels of choice, the IRS should consider modernizing its communication channels. The agency currently reaches out to taxpayers via US mail for sensitive information, but this may no longer be the most secure option. The IRS should be able to modernize its communication channels using appropriate authentication techniques, similar to those increasingly used by tech companies supporting a hybrid or remote workforce. The IRS already encourages people to file tax returns online, which always contain sensitive information – so they should up their game and do the same for support. Modernizing the communication channels can help the agency keep up with customer expectations and provide a better experience.

Dealing with the Past

The IRS has been facing a significant backlog for years, with millions of paper tax returns still unprocessed. RPA could be an opportunity to improve IRS operations by detecting errors in tax filings and calculations in real time. AI-powered technology can also be used to provide proactive assistance to customers in filling out their tax forms. This could include real-time pings, chatbots, and agent support,perhaps taking inspiration from some similar methods used by high-quality tax preparation services in the private sector. This superior communication with customers on IRS questions could save the IRS money that is currently wasted on administrative matters, and also cut down on tax-related mistakes that cost the organization substantial funds to fix.

With improving customer service as a priority and a chunk of the fund earmarked to do so, this is an opportunity for the IRS to improve its customer service — as well as its reputation — while saving money and reducing mistakes. Keeping CX front and center is a win-win situation for everyone. April 18 is almost here – don’t forget to file your taxes!


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