Tim’s Tax News on the Tenth – February 2022

The Internal Revenue Service announced last month that, starting this summer, anyone wanting to access their records on the IRS website (including details about child tax credits, payment plans, tax records or transcripts, and unemployment insurance) would first be required to record a video of their face with their computer or smartphone and send it to the private contractor, ID.me, to confirm their identity.

But ID.me’s $86 million contract with the IRS immediately caused major concerns, including many researchers, privacy advocates and legislators, who worried about how the facial images and personal data of millions of Americans would be safeguarded, especially since there is no federal law regulating how the data can be used or shared.

To verify one’s identity, the IRS had planned to require scans of a person’s face, as well as copies of identifying paperwork, such as a driver’s license, government-issued ID, or utility bill. The plan was to then have ID.me use its facial recognition software to assess whether a person’s “video selfie” and official photo matched. If the system flagged an issue, the person would then join a live video, where one of the company’s employees would ask them to hold up physical copies of personal documents, such as a passport, birth certificate, or health insurance card.

But earlier this week, the plan to require face scans has ceased from moving forward, at least for now, as confirmed by Chuck Rettig, IRS Commissioner, who stated: “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.”

Some of the “pros” for facial recognition:

• Tough Security and Accuracy Standards:  ID.me’s co-founder and chief executive, Blake Hall, claims his company’s system has met tough security and accuracy standards. He compared the identity checks to someone being asked to show an ID when opening a bank account, and claims he is simply “digitizing a process Americans are already quite used to.” Hall’s intent is to “create a ubiquitous ID network” and thinks it is a “fundamental problem that digital identity is in the hands of two advertising companies, Facebook and Google.”

• Better User Experience:  Advocates for facial recognition say the system is quicker, simpler, and more reliable than the IRS’s old verification systems, and very similar to facial recognition in software such as Face ID, which people now use to unlock their iPhones.

• ID.me only uses “Best of Breed” software:  ID.me’s co-founder and chief executive Hall claims his company licenses its software from two companies that are “best of breed”: Paravision, for one-to-one matching, and iProov, for detecting whether the face on a video is real or a mask. Paravision’s algorithm has ranked among the better performers in the National Institute for Standards and Technology tests.

Some of the “cons” for facial recognition:

• There is a potential for weaponization and abuse of facial recognition technologies:  ID.me’s privacy policy says it can use people’s sensitive or personally identifiable information to “cooperate with law enforcement activities” and alerts its government clients when it detects “clear cases” of identity theft or fraud. It also stores the data for at least seven years.

• There is no Federal law regulating how the data can be used or shared:  Many are concerned and want to know how Americans’ facial images and personal data will be safeguarded in the years to come. IRS’s outsourcing of identity checks to a private company could also weaken the public’s ability to know how information is being used, especially since no federal laws govern how facial recognition should work nationwide.

• The System itself is also drawing complaints:  Some have reported frustrating glitches and hours-long delays that have kept them from important benefits, and researchers argue ID.me has overstated the abilities of a face-scanning technology that could wrongly flag people as frauds.

• There can be substantial racial bias in facial recognition technology:  According to a 2019 report from the Department of Commerce, after conducting an analysis of one-to-one facial recognition algorithms, the results showed “higher rates of false positives for Asian and African American faces relative to images of Caucasians.” There were also security concerns after instances where “the software wrongly considered photos of two different individuals to show the same person.”

• Delays in Benefits and Unnecessary Scrutiny:  Problems with the facial recognition technology’s accuracy can result in government benefits being denied. And, as if that was not bad enough, it could also cause unnecessary scrutiny and many headaches to “false positive” victims, including costs, time, and money to clear one’s name.

For now, due to the numerous concerns that have been raised, the IRS announced earlier this week that it will transition away from using a third-party service for facial recognition to help authenticate people creating new online accounts. The IRS is also working quickly to develop an additional authentication process that does not involve facial recognition. It will, however, continue to work with third-party services to develop authentication methods that protect taxpayer data and ensure broad access to online tools. In the meantime, taxpayers can continue to file their return or pay taxes owed and there is no impact on the current tax season.



If you would like more details, please do not hesitate to call our office. Our office has been successful in helping taxpayers with IRS and IDOR collection problems for over 29 years. If you have a tax or debt problem, please contact me at 847-705-9698 or thughes@lavellelaw.com and find out how we can help you.

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