DETECT Act Mandates Study on Using AI to Catch Tax Cheats Within 180 Days

The Digital Evaluation for Tax Enforcement and Compliance Tracking Act of 2025, or the DETECT Act, starts off with a clear mission: figuring out if the IRS should bring in the robots. Specifically, Section 2 of the Act requires the Comptroller General—the head of the Government Accountability Office (GAO)—to conduct a deep dive into how the Internal Revenue Service (IRS) could potentially use Artificial Intelligence (AI) to detect tax fraud.

The AI Tax Cop Report

This isn't about immediately deploying Skynet to audit your 1040; it’s about getting the homework done first. The law sets a tight deadline: the Comptroller General must complete this comprehensive report on AI's potential for fraud detection and compliance tracking within 180 days of the Act becoming official. This means policymakers will get a clear picture of the feasibility, costs, and benefits of AI in tax enforcement very quickly.

Once finished, the report doesn’t just sit on a shelf. It must be delivered directly to the two main tax-writing committees in Congress: the House Committee on Ways and Means and the Senate Committee on Finance. For busy people, this is significant because these committees are the ones who ultimately decide on IRS funding and enforcement strategies. Getting this data fast-tracks any future decisions about upgrading the IRS’s technological capabilities.

Why This Matters for Everyone Else

While this section only mandates a study, it lays the groundwork for how the IRS might interact with taxpayers in the future. Right now, audits are often triggered by specific red flags or random selection. If AI proves effective, it could lead to more targeted enforcement. For the vast majority of honest taxpayers—the office worker, the small business owner, the contractor—this could mean fewer random audits and a more efficient system overall. The idea is that AI could potentially zero in on sophisticated fraud schemes, which theoretically benefits everyone by ensuring fair tax collection without increasing the burden on compliant citizens.

However, the report itself will be the first step in revealing the practical challenges. Will AI flag honest mistakes as fraud? Will it require massive system overhauls that cost billions? This initial study is crucial because it will define the starting line for what could be a major technological shift in how the government collects taxes, affecting everything from how quickly refunds are processed to how enforcement resources are allocated.