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IRS drops biometric authentication requirement, prepares for Login.Gov after filing date

New study predicts global 17 percent CAGR for identity verification
IRS drops biometric authentication requirement, prepares for Login.Gov after filing date

A new non-biometric authentication option for taxpayers signing up for IRS online accounts is now operational, announces the agency, following the controversy around its contract with ID.me and decision to funnel users into using the private firm’s facial recognition. More details on data deletion have also emerged.

The new option is the live video interview. Choosing the video call option means no selfie is needed, and no facial recognition. ID.me’s CEO and Co-founder Blake Hall stated on 8 February that the firm had “modified our process so government agencies can empower people to choose to verify their identity with an expert human agent without going through a selfie check. Agencies can now select this configuration.”

The IRS release does not specify whether the new video option is the service already provided by ID.me, or whether it is with agents from the IRS or elsewhere. When Biometric Update sought clarity from ID.me, the firm did not answer explicitly, but said by email: “ID.me is an identity verification company. Our capabilities extend well beyond facial recognition. We have thousands of customer support agents who verify people through video chat.

“ID.me believes in choice. Our customers and the public asked for more options to choose the verification pathway that works best for them. We moved swiftly to accommodate those requests.”

ID.me announced plans to hire 500 people to support its video chat identity verification last May, shortly after the IRS was reported to be helping about 1 in 50 callers with live support.

Automatic biometric data deletion, short-term fix

Users can still opt for the ID.me automated channels. The release states that for taxpayers choosing this option for opening an account for IRS filing and therefore submitting selfies, new requirements mean these images will be deleted after they are used for the biometric comparison.

Likewise for other taxpayers who had previously opened online filing accounts. Their biometric data collected in the process “will also be permanently deleted over the course of the next few weeks,” states the release. This appears to move data deletion to the option described by Hall as “all ID.me users will be able to delete their selfie or photo at account.ID.me beginning on March 1.”

The IRS regards these updates as a short-term solution, to be in place up until the tax filing deadline for 2022 (18 April for most taxpayers). In the meantime the agency commits to working closely with partners in government to roll out the single sign on Login.Gov as an authentication method. The release states “the General Services Administration is currently working with the IRS to achieve the security standards and scale required of Login.Gov, with the goal of moving toward introducing this option after the 2022 filing deadline.”

While some have defended the use of facial recognition by government agencies, pressure continues for a broader retreat from ID.me services. Most recently, three senators who want states using ID.me to end their contracts, have written to the federal Labor Department to encourage it to dissuade states’ unemployment agencies from using facial recognition for identity verification. The senators also want states to integrate Login.Gov.

Following the IRS announcement, Senators Jeff Merkley (D-OR) and Roy Blunt (R-MO) introduced a bill to ban the use of facial recognition by the IRS.

Merkley called the use of the technology “burdensome, invasive, inconsistent, and unnecessary,” in an announcement which, like the bill itself, makes no mention of fraud or suggestion for an alternative way to prevent it.

The bill would give the IRS 60 days to ensure all biometric data collected by it or its contractors has been deleted.

Global identity verification market to reach $17.7B in 2026 – report

ID.me may be facing challenges, but the overall demand for digital ID verification looks strong.

Standing at around $8 billion in 2021, the identity verification market is expected to reach $17.7 billion in 2026 with a compound annual growth rate (CAGR) of 17.1 percent, according to a new report by BCC Research.

The forecasts in ‘Identity Verification: Global Markets 2021-2026’ include verification and end-user industries, and excludes identity authentication-based software, solutions and services as well as ID verification-based products in pilot phases or live for demonstration purposes.

The report cites the increasing frequency of identity theft and cyberattacks, which have accelerated during the COVID-19 pandemic, as driving forces behind the market’s growth predictions. Stricter requirements from regulatory authorities will also lead to more spending and investment in the sector.

This post was updated at 3:59pm Eastern on February 23, 2022 to note the introduction of legislation to ban the use of facial recognition by the IRS.

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