After receiving backlash from the right, left, and middle following reports last week that the IRS planned to require taxpayers submit a combination of documents and biometric data to access some of the agency’s online services, the agency announced that it will no longer require taxpayers to use facial recognition system to access some online services.  This swift change in policy is a massive win for taxpayer privacy. 

            The company that the IRS had been utilizing, Id.me, has a troubling past when it comes to protecting the identity and personal information of their users.  The company’s CEO Blake Hall has been in hot water for the past few weeks.  He initially claimed that the company uses a 1:1 technology that is supposed to compare the face in a video selfie to documents like a driver's license.  However, Hall later acknowledged in a LinkedIn post that the company collects a database of faces their users have submitted which is accessible to government agencies but not to the public.  It has also been reported that Id.me has been working with the IRS and other government agencies for months, but this story has gotten more attention in the past two weeks.

           The new IRS biometric process has been criticized from groups with a variety of backgrounds, including the ACLU, privacy advocates, and members of Congress like Sens. Ron Wyden (D-Ore.), Mike Lee (R-Utah), and John Thune (R-S.D.), and Rep. Ted Lieu (D-Calif.).  Starting on March 7, 2022, the IRS will no longer work with Id.me or require taxpayers to use facial recognition technology to access their online accounts.

          The IRS claims that the technology is safe to use, and this development was meant to crack down on the uptick in fraudulent tax paperwork, through which criminals steal taxpayer identification and receive a tax refund.  However, the IRS has not done a good job at protecting private taxpayer information, often leaking information, most recently in October 2021.

          If the IRS is serious about cracking down on fraudulent tax refunds, there are several actions the agency could take.  The agency should   modernize its ancient computers systems and make them less susceptible to hacking.  As the Taxpayer Advocate Service pointed out, the IRS has developed hundreds of new software programs but they can neither interface with each other nor integrate new technologies. 

            The IRS’ reversal on facial recognition technology is a win for taxpayers, but there will always be proposals to expand the agency’s reach and power that should also be rejected, like giving the agency the power to fill out tax returns.  The rise in fraudulent tax refunds is troubling and should be stopped but the IRS should better use the tools it already has to stop this kind of waste and abuse and look for new ideas that will be effective without compromising taxpayer privacy.