The IRS had said it would soon start asking taxpayers who want to log in to its website to use facial recognition software to verify their identity. This was not going to be mandatory for taxpayers who already had a username and password until the summer. But read on for more details, including a recent statement that seems to end the program even before it comes mandatory.
There was a lot of controversy around this program, which was intended to prevent fraudulent claims. The IRS argues that taxpayers can opt to pay or file their taxes or request a transcript the old-fashioned way: by snail mail. But others argue that the requirement, which allows a private company (ID.me) to collect personal photos and data under an $86 million contract, has no guardrails for how the photos and data will be used in the future. They want stricter limits on facial recognition to protect privacy.
ID.me, which has been around for about 10 years, became a “go to” for more than half the states seeking to prevent fraudulent claims (e.g., for unemployment and child care credit claims) during the pandemic. Anyone who filed claims for these programs is already in the system. California, Florida, New York and Texas are among the states that use it.
ID.me’s verification process includes taking a picture of a photo ID (e.g., a driver’s license or passport) and then taking a video selfie with a smartphone or computer so software can compare the two. Then, there is an in-person video call with an agent. The process can be complicated, and users have reported many glitches, including difficulty uploading the required documents and long waits for the video call. These problems result in people having to wait to get their benefits.
This is how the company verifies identity: According to a company spokesperson, the company first uses one-to-one facial recognition for verifying the identities of users and then checks users against an internal database of selfies to look for “prolific attackers and members of organized crime who are stealing multiple identities.” People who are matched with a photo in ID.me’s database are sent to a video chat for verification.
In addition to the IRS, ID.me also verifies identities for a number of federal agencies, including the Department of Veterans Affairs, Social Security Administration and U.S. Patent and Trademark Office.
Will it even happen?
After all this, however, the IRS issued a statement on Feb. 7 saying it would “transition away from using a third-party service for facial recognition to help authenticate people creating new online accounts.” It further said it would “quickly develop and bring online an additional authentication process that does not involve facial recognition.” So facial recognition is probably off the table for the short term, and we will be watching for future developments.
Laws, regulations and ordinances regarding biometric data
Currently, there is no federal law regulating how the data can be used or shared. Instead, the law is a maze of state and local ordinances. These ordinances mostly address biometric data in general and do not specifically refer to facial recognition, which is one aspect of biometric data. Examples include:
- Illinois, Washington and Texas have enacted state laws comprehensively addressing biometric privacy.
- Virginia, Massachusetts and Maine and many cities have banned or restricted the use of facial recognition by public officials or police.
- New York City’s “biometric identifier information” law, which became effective in January, protects individuals from some uses of facial recognition. However, it does not apply to the use of biometric identifiers “by government agencies, employees or agents” or financial institutions.
This is an evolving area. Taxpayers and business owners should stay abreast of the changes because many aspects of life are and will continue to be affected by this technology and how it can be used. In the meantime, be prepared for the IRS’s new facial recognition policy.
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