The IRS Just Gave This Major Update to Taxpayers Amid Backlash

The IRS recently announced that it would implement a new online sign-in system this year.

In Nov. 2021, the IRS revealed that it had plans to update how users sign in and verify their identity for most of the agency's online services. According to The New York Times, the Treasury Department had chosen to partner with ID.me, an identity verification company, through an $86 million contract to try to make taxpayer accounts safer from data leaks and identity theft. ID.me utilizes facial recognition to vet people's identity, so creating an account with the system would require users to "provide a photo of an identity document such as a driver's license, state ID or passport as part of the identity verification process," as well as take a selfie to match their ID document, per the IRS.

"Once they verify their identity, they can use their account across multiple IRS tools and at other government agencies that also use ID.me," the agency explained in November.

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But it is now pulling plans for the new system.

On Feb. 7, the IRS posted a new statement, notifying taxpayers that it would no longer be following through with the full implementation of ID.me. According to the announcement, the agency said it "will transition away from using a third-party service for facial recognition to help authenticate people creating new online accounts."

The IRS has chosen not to utilize facial recognition and instead "will quickly develop and bring online an additional authentication process" that does not involve the use of this type of technology. In addition, the agency said it will continue working with other government agencies to protect taxpayer data and ensure broad access to online tools without an ID.me system.

"The IRS takes taxpayer privacy and security seriously, and we understand the concerns that have been raised," IRS Commissioner Chuck Rettig said in a Feb. 7 statement. "Everyone should feel comfortable with how their personal information is secured, and we are quickly pursuing short-term options that do not involve facial recognition."

This decision comes after the agency faced major backlash.

The IRS has received heavy criticism in the last few weeks after announcing plans to join forces with ID.me. According to The New York Times, the new system both frustrated taxpayers and raised concerns about the collection of sensitive biometric data. Many critics and advocacy groups also complained that facial recognition software was an invasion of privacy, while lawmakers began receiving complaints that the IRS website had become harder to use because of the new system.

"The IRS got way ahead of itself by forcing taxpayers to use facial recognition without having done the hard work of ensuring the technology’s appropriateness," Eric Goldman, co-director of the High Tech Law Institute at Santa Clara University, told The New York Times. "The IRS backtracking on facial recognition-based identity verification provides a strong cautionary tale for any other government agencies thinking facial recognition is an easy or quick solution."

But some experts have defended the facial recognition system.

While there was significant backlash against the implementation of ID.me, some technology experts have said that fears over the introduction of the system were unfounded. "A lot of it is just irrational discomfort over face recognition ever being mentioned,” Nicholas Weaver, a computer science lecturer at the University of California, Berkeley, told The New York Times, adding that he believes facial recognition technology is far safer than having to provide websites with other identifying information.

And while the company behind ID.me has been referring questions on the matter to the IRS, it did appear to defend itself following the tax agency's decision to transition away from its system. "ID.me is an identity verification company. We orchestrate numerous tools," the company tweeted from its official account on Feb. 7. "Facial recognition is just one of the components we use to follow the federal standards. Without it, the identity thieves behind these masks would be much more successful."

You can still file your taxes online despite the transition.

The IRS has not given an exact deadline for when the ID.me system will be completely removed, but the agency said the shift will "occur over the coming weeks," according to CBS News. The IRS had announced earlier that taxpayers were not being required to utilize the facial recognition software to access online tax tools until summer 2022, so it is not expected that this transition will affect the current tax season.

"The transition announced today does not interfere with the taxpayer's ability to file their return or pay taxes owed," the agency said in its Feb. 7 announcement. "During this period, the IRS will continue to accept tax filings, and it has no other impact on the current tax season. People should continue to file their taxes as they normally would."

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