Don't Mess With Taxes

House Oversight Committee members also investigating ID.me contracts, verification methods

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In early February, the Internal Revenue Service announced plans to transition from ID.me's facial scanning identity verification system. The third-party service's scanning technology raised privacy concerns.

A few weeks later, the IRS elaborated on its taxpayer identity process. It said the facial recognition would remain, but as an option, not a requirement. Taxpayers instead could participate in a live, virtual interview to prove they are legitimately opening their own online taxpayer account.

The IRS also indicated that it eventually would join other federal agencies in using Login.Gov, the identity verification system created by the General Services Administration (GSA) and which does not use biometrics. That move, said the IRS would come after the April 18 tax filing deadline.

But apparently, that shift to the GSA system is not on the fast track, at least not where tax professionals are involved.

ID.me enrollment requirement for tax pros: In a May 4 email via its QuickAlerts system, the IRS encouraged tax pros to set up an ID.me account now. The third-party's authentication is the only way, said the email, that this summer they would be able to access 11 electronic tax pro services.

The e-Services suite of tax professional online applications and products that will be behind the ID.me verification wall in a few weeks include —

• Affordable Care Act (ACA) for Transmitter Control Code (TCC)
• Application Program Interface (API) Client ID Application
• e-File Application
• Information Returns (IR) for TCC
• Income Verification Express Service (IVES) Application
• State Applications (State EFIN and TDS State)
• TIN Matching, including Bulk and Interactive TIN Matching
• Transcript Delivery System (TDS)
• Secure Object Repository (SOR)
• Modernized e-File (MeF)
• ACA Information Returns (AIR)

The IRS also advises tax pros that need to create a Secure Access account for e-Services now, but who can't authenticate their identity through the online Secure Access process, to contact the agency's e-Help Desk for assistance.

"If the e-Help Desk can't assist you in creating your account, they'll advise you to make an appointment at a Taxpayer Assistance Center (TAC) to prove your identity in person," says the IRS email.

The IRS has given tax pros a mid-June deadline.

"You must complete your in-person proofing and contact the e-Help Desk back by June 15, 2022, for your account to be created. If you can't complete this process by June 15, 2022, you must wait for the e-Services migration to ID.me," per the email.

Contract in place, but Congress investigating: It's not surprising that the IRS is continuing to use ID.me services. Its $86 million contract with the suburban Virginia firm is in place through Jun 10, 2023.

And electronic tax life goes on, especially for tax professionals. Still, I feel for tax pros who are not comfortable with ID.me's facial scanning method, and who have to jump through more hoops to get online access to provide services to their taxpayer clients.

Congress also remains concerned about ID.me biometric techniques and its reach across all levels of government. The firm currently has contracts with 30 states and 10 federal agencies.

Just before this year's filing deadline, two House Democrats wrote Blake Hall, ID.me's chief executive, asking for detailed records about the company's contracts with federal, state, and local governments, as well as answers about how it investigates potential inaccuracies in its systems.

Among the questions raised in the 10-page April 14 letter from Rep. Carolyn B. Maloney of New York, chair of the House Committee on Oversight and Reform, and Rep. James E. Clyburn of South Carolina, House Majority Whip and chair of the House Select Subcommittee on the Coronavirus Crisis, are —

• how many people have completed ID.me's face-based identity verification process, and
• how many were rejected while trying to access a government service.

The Representatives are concerned that a large number of rejections would suggest that there are accuracy issues with the company's facial recognition technology. The lawmakers also want details about ID.me's data retention policies.

Maloney and Clyburn also expressed concern that the "ID.me process creates disproportionate obstacles for older individuals who may face challenges using new technology, residents of rural and low-income areas without high-speed internet access, and households that share technological devices for school, remote work, or job hunting. Even without factoring in burdensome wait times, ID.me's requirements that applicants use email addresses and smartphone cameras may have barred Americans who lacked those resources from assistance."

Not fooling around: In closing, Maloney and Clyburn also stressed that they are serious in wanting answers, all of which they want by April 28.

"Just as taxpayer dollars must be shielded from fraudulent actors, they must be protected from private companies that may seek to pad their profits while providing inadequate services," the House members wrote.

They also laid out their authority to see answers from ID. me, telling Hall — 

     "The Committee on Oversight and Reform is the principal oversight committee of the House of Representatives and has broad authority to investigate 'any matter' at 'any time' under House Rule X. The [Coronavirus Crisis] Select Subcommittee is authorized by the House of Representatives to 'conduct a full and complete investigation' of 'issues related to the coronavirus crisis,' including 'reports of waste, fraud, abuse, price gouging, profiteering, or other abusive practices related to the coronavirus crisis.'"

Depending on what the Maloney/Clyburn inquiry turns up, the ID.me contract could run the remainder of its term. Or Uncle Sam could decide to cancel at least the IRS component.

I used my legacy IRS taxpayer account last week to ensure that the IRS had recorded my April 18 e-payment for the 2021 tax year. It's the one I established years ago and which, like my bank, credit card, and investment accounts, requires two-factor authentication. I'll keep using it until the agency locks me out for not having an ID.me account.  

Then I'll wait for the agency to join the GSA Login.Gov system to re-establish my online taxpayer account.

You also might find these items of interest:

• IRS online taxpayer account access soon will require selfies, more personal info (Jan. 22, 2022)
• IRS backs down on ID.me facial recognition requirement (Jan. 31, 2022)
• IRS does about face on taxpayer account facial recognition (Feb. 7, 2022)
• IRS account facial ID still an option, but no longer required (Feb. 22, 2022)

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