By Sagar Shankaran, Founder of CallSphere
The Biden administration's AI modernization push leads to rapid deployment of AI agents across IRS, VA, SSA, and USPS, transforming public service delivery.
Key takeaways
The United States federal government has deployed more than 200 AI agent systems across 24 agencies, according to the Office of Management and Budget's (OMB) quarterly AI implementation report released on March 10, 2026. The deployment represents the most aggressive government AI rollout in any major democracy, driven by Executive Order 14215 — the "AI-Powered Government Modernization Act" signed in October 2025.
The executive order mandated that every cabinet-level agency identify at least five citizen-facing processes suitable for AI agent automation and deploy working systems within 180 days. Remarkably, most agencies met or exceeded this aggressive timeline, driven by a combination of top-down mandate, dedicated funding ($2.4 billion allocated in the FY2026 supplemental budget), and a new procurement framework that dramatically simplified the process of acquiring AI services.
"This is not about replacing federal workers," said Bruce Reed, Deputy Chief of Staff, in a briefing accompanying the report's release. "This is about giving federal workers AI tools that let them focus on complex casework while AI handles the routine interactions that currently create bottlenecks and wait times measured in weeks and months."
The Internal Revenue Service's deployment is the largest by volume. Three AI agent systems — collectively branded "IRS Digital Assistant" — handled over 40 million taxpayer interactions during the January-March 2026 tax filing season.
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INPUT(["User intent"])
PARSE["Parse plus<br/>classify"]
PLAN["Plan and tool<br/>selection"]
AGENT["Agent loop<br/>LLM plus tools"]
GUARD{"Guardrails<br/>and policy"}
EXEC["Execute and<br/>verify result"]
OBS[("Trace and metrics")]
OUT(["Outcome plus<br/>next action"])
INPUT --> PARSE --> PLAN --> AGENT --> GUARD
GUARD -->|Pass| EXEC --> OUT
GUARD -->|Fail| AGENT
AGENT --> OBS
style AGENT fill:#4f46e5,stroke:#4338ca,color:#fff
style GUARD fill:#f59e0b,stroke:#d97706,color:#1f2937
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Filing Assistance Agent: This agent guides taxpayers through the filing process, answering questions about which forms to use, how to report specific types of income, and how to claim deductions and credits. It operates on the IRS website, through a dedicated mobile app, and via phone (using voice AI). The agent handles approximately 120,000 interactions per day during peak filing season.
The agent is built on a retrieval-augmented generation architecture that draws from the complete IRS knowledge base — all publications, instructions, revenue rulings, and frequently asked questions. Every response includes a citation to the specific IRS publication or code section it references.
"The filing assistance agent answered 89% of taxpayer questions without requiring transfer to a human agent," said IRS Commissioner Danny Werfel. "For context, our previous interactive voice response system resolved about 30% of calls. The remaining 70% waited an average of 27 minutes for a human agent. Now, 89% get an instant answer, and the 11% who need a human agent wait an average of 4 minutes because our human agents are no longer overwhelmed with routine questions."
Refund Status Agent: This agent provides real-time refund status information with natural language explanations. Instead of the cryptic three-bar status indicator on "Where's My Refund?", the agent provides specific information about where a return is in the processing pipeline and, when delays occur, explains the reason and expected resolution timeline.
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Audit Correspondence Agent: For taxpayers undergoing audits or responding to IRS notices, this agent helps decode official correspondence, explains what documentation is needed, and assists in preparing responses. It does not handle audit negotiations or settlements — those remain with human auditors — but it addresses the confusion and anxiety that many taxpayers experience when they receive an IRS notice.
The Department of Veterans Affairs deployed 35 AI agents across its healthcare and benefits divisions. The highest-impact deployment is the healthcare scheduling agent, which has reduced average appointment wait times from 28 days to 11 days at participating VA medical centers.
The scheduling agent operates as a multi-step system. It first assesses the veteran's medical needs through a structured triage conversation (reviewed and approved by VA clinical staff). It then searches for available appointments across all VA facilities within a reasonable geographic radius, including community care providers contracted by the VA. It can book appointments, arrange transportation through the Veterans Transportation Service, send reminders, and handle rescheduling.
"A veteran in rural Montana used to call our facility, get put on hold, finally reach a scheduler, and then be told the next available cardiology appointment was in 6 weeks at a facility 90 miles away," said Dr. Shereef Elnahal, VA Under Secretary for Health. "Now, the AI agent finds that a community care cardiologist 20 miles away has an opening next week, confirms the veteran's eligibility, and books it — all in one conversation."
The VA also deployed a benefits navigation agent that helps veterans understand and apply for the benefits they have earned. The benefits system is notoriously complex — there are over 200 distinct benefit programs administered by the VA — and many veterans miss benefits they are entitled to simply because they do not know they exist or cannot navigate the application process.
The Social Security Administration's (SSA) AI agent deployment focuses on the disability claims process, which has been the agency's most persistent operational challenge. The average processing time for an initial disability claim was 213 days in FY2025 — a backlog that causes genuine hardship for applicants who cannot work.
SSA deployed two primary AI agent systems.
Claims Intake Agent: This agent assists applicants in completing the initial disability application, which requires detailed medical, employment, and functional capacity information. The agent conducts a structured interview, identifies missing information, and helps applicants articulate their functional limitations in the specific language that SSA adjudicators need.
"The quality of initial applications has improved dramatically," said SSA Commissioner Martin O'Malley. "Incomplete applications are the single biggest driver of processing delays. When the AI agent ensures that applications are complete and properly documented at intake, it eliminates weeks of back-and-forth correspondence."
Status and Communication Agent: This agent provides claimants with real-time updates on their application status, explains what stage of the process their claim is in, and alerts them when action is needed on their part. It also handles routine requests — address changes, direct deposit updates, and document submissions.
Early results show a 23% reduction in average processing time at SSA field offices using the AI agent systems, though the agency cautions that the full impact will not be measurable until the systems have been operational for a complete claims cycle.
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The United States Postal Service deployed AI agents focused on customer-facing package tracking and service inquiries. The USPS AI agent handles approximately 2 million customer interactions per week, primarily through the USPS website and a text message interface.
The agent provides detailed, natural language explanations of package status (replacing the often-confusing scan event descriptions), proactively notifies customers of delays, and can initiate package intercepts, holds, and rerouting. For lost packages, the agent can file a missing mail search request and track its progress.
The OMB report dedicates significant attention to the security and privacy frameworks governing federal AI agent deployments. All systems operate under the "AI Safety Framework for Federal Services," published by NIST in November 2025.
Key safeguards include mandatory human-in-the-loop for any agent action that affects a person's legal rights, benefits, or obligations. AI agents can provide information and assist with form completion, but they cannot make adjudicative decisions. All IRS audit determinations, VA benefits decisions, SSA disability determinations, and similar consequential actions remain with human decision-makers.
Every AI agent interaction is logged with a full audit trail. Citizens can request a transcript of any AI agent interaction. And every AI agent-facing system includes a one-command escalation to a human agent — the executive order requires that human escalation be available within 2 minutes during business hours.
Privacy protections include end-to-end encryption for all agent interactions, strict data minimization (agents access only the specific records needed for the current interaction), and prohibition on using citizen interaction data for model training without explicit consent.
The deployment has not been without criticism. Senator Josh Hawley introduced legislation in February 2026 requiring a "human right to opt out" of AI agent interactions for all federal services, arguing that citizens should always be able to choose to interact with a human.
Civil liberties organizations, including the ACLU, have raised concerns about the potential for AI agents to disproportionately misserve populations with limited English proficiency, disabilities that make voice and text interaction difficult, or distrust of automated systems rooted in historical government mistreatment.
The Government Accountability Office (GAO) announced in March 2026 that it will conduct a comprehensive review of federal AI agent deployments, with a report expected in Q4 2026 covering accuracy, equity, accessibility, and cost-effectiveness.
The OMB estimates that the 200+ AI agent deployments will save the federal government approximately $3.6 billion annually in reduced call center costs, faster processing times, and decreased error rates. Against the $2.4 billion implementation investment, the administration projects a positive return within 18 months.
Whether these projections prove accurate will be closely watched. If the federal government demonstrates that AI agents can improve public service delivery at scale, the model will likely be replicated by state governments, allied nations, and international organizations. The UK, Australia, and Singapore have already sent delegations to study the US implementation.
Written by
Sagar Shankaran· Founder, CallSphere
LinkedInSagar Shankaran is the founder of CallSphere, where he builds production AI voice and chat agents deployed across healthcare, hospitality, real estate, and home services. He writes about agentic AI, LLM engineering, and shipping voice agents that handle real calls in production.
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OMB issued an updated AI procurement memo (M-26-08) on April 14, 2026, requiring agencies to maintain AI inventories and sign-off chains for high-impact uses.
Biden's Executive Order 14110 was rescinded in January 2025, replaced by Trump's EO 14179 and the July 2025 America's AI Action Plan. The original safety obligations did not vanish — they are now baked into federal RFPs, OMB memos, and 230 Treasury controls.
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