The IRS Electronic Tax Administration Advisory Committee (ETAAC) has released its 2026 Annual Report to Congress. ETAAC acknowledges that the IRS has made progress in its efforts to be more tech-forward. But the report also makes it clear that modernization is not finished and, in some areas, is still catching up.

Recommendations in the Annual Report

The report includes 18 recommendations. Some are highly technical, like improving Modernized e-File (MeF) reject codes and building better API access. API access means one computer system can securely connect to another and automatically request or send data, so for example, instead of a tax pro logging into an IRS account for taxpayer information, API access could allow authorized software to request that information directly from the IRS after the taxpayer has given permission.

Others are the kinds of things taxpayers and tax pros have been asking for for years, like better online accounts, faster issue resolution, more useful notices, and less reliance on paper.

ETAAC credits the IRS for recent improvements, including online accounts, digital notices, document-upload tools, telephone improvements, and chatbot capabilities. But the report also points out what many taxpayers and tax professionals already know: there are still too many systems that don’t talk to each other or use the same tech.

ETAAC says the IRS needs to continue moving toward a unified, modern technology stack. That means reducing reliance on aging systems, improving interoperability, and avoiding the temptation to keep adding new tools on top of old infrastructure (some systems date back to the Kennedy era).

EFIN and PTIN Validation

ETAAC says the IRS should implement real-time validation of Electronic Filing Identification Numbers (EFINs) and Preparer Tax Identification Numbers (PTINs). These are the credentials that tax preparation businesses and individual preparers use to e-file.

Right now, there is no easy way to independently verify whether an EFIN or PTIN is valid—or if it’s been stolen. Identity thieves increasingly target tax pros to get access to these credentials and to the taxpayer data that comes with them. ETAAC recommends building secure APIs that allow verified industry partners to validate credentials in real time. This has been on their radar for some time and the committee notes that budget shortfalls have repeatedly delayed progress.

Artificial Intelligence

ETAAC supports the IRS using Artificial Intelligence (AI) to improve accuracy, speed up service and strengthen compliance and security. That could include fraud detection, identity verification, and other internal processes.

But ETAAC also stresses that if the IRS is going to use AI, taxpayers should also understand how it’s being used. The report recommends that the IRS publish and regularly update a public AI disclosure dashboard or webpage written in plain language to explain how the IRS is using AI, what the process looked like before AI, how risks are being managed, and how taxpayers can seek help or challenge an AI-assisted action.

Treasury previously published a public inventory of AI use cases that included the IRS, but that inventory is no longer publicly available as of spring 2026. ETAAC’s call for a new public dashboard is a response to that gap.

ETAAC also recommends public town hall-style meetings on IRS AI projects, especially those that could affect taxpayer rights or safety.

One of the most practical parts of the report focuses on IRS Online Accounts and Tax Pro Accounts.

For taxpayers, online accounts can be a great way to check balances, make payments, view some notices, and access information without calling the IRS. (I’ve been encouraging taxpayers to sign up for theirs.)

For tax professionals, Tax Pro Accounts are supposed to make it easier to represent clients and........

© Forbes