This AI Startup Is Selling Tax Agencies A New Way To Find Cheats

J osh Sandler’s pitch beings with a grievance more taxpayers understand: Your bill gets bigger when someone else doesn’t pay theirs. His startup, Govra, is building AI agents for government agencies, beginning with tax audits. While the prospect of more tax audits might sound unpleasant, Sandler thinks it’s in our best interest: Better enforcement is how governments collect what is already owed without raising taxes on everyone else.

“No one wants to pay more because someone else is skirting the system,” Sandler said. Recovering unpaid taxes, he argues, could finance public services, reduce debt or make room for tax cuts.

Govra, a member of Forbes’ inaugural Agentic 20 list, is building for the other side of the counter. While most AI agents are pitching consumer solutions to fight tickets or file taxes, Govra’s software is designed to help the government agencies handling those submissions.

Sandler, who previously studied development economics and built a trucking marketplace in Africa, says his past experiences taught him that successful businesses depend on functioning governments delivering basic services. And functioning governments need tax revenue.

He estimates the combined federal, state and local tax gap at $1 trillion annually. The IRS’s latest projection covers federal taxes alone: $696 billion owed but not paid on time for 2022, falling to $606 billion after expected enforcement collections and late payments. A September Maryland audit found roughly 18,300 delinquent accounts, totaling $251.7 million, were not being actively pursued.

“If you can’t collect money that’s owed, how are you going to provide the services?” Sandler asks.

In Indiana, where the revenue department is preparing a pilot, Mark Ashworth, its executive director of business systems support, estimates auditors spend about a third of their time assembling material before the substantive audit begins. He wants Govra to reduce that preparation from weeks or months to minutes.