Some members of Congress are pushing the IRS to reevaluate its present identity verification procedures as the agency tries to expand its free online tax preparation service. These politicians feel that the current approach, which requires the use of ID.me, may be unduly restrictive for a large number of filers, and they are calling on the IRS to offer substitute means for taxpayers to identify themselves.
In 12 states, the IRS is now testing its Direct File program, which offers a free tax return submission option. The Treasury Department has announced that this trial run, which was started for the 2023 tax year, will be greatly expanded. By the 2024 tax season, taxpayers in 24 states will be able to file their taxes using Direct File, as the program’s scope is expected to double. In addition to covering more complicated tax scenarios, this wider deployment intends to increase accessibility for a greater number of people.
According to Treasury Department projections, more than 30 million taxpayers will be eligible to use Direct File to file their taxes in 2024. The goal of the program is to give free tax preparation assistance in place of the paid services provided by businesses like H&R Block and Intuit, the parent company of TurboTax. Treasury Secretary Janet Yellen emphasized the potential financial benefits of this program, stating, “By doubling the number of participating states and expanding eligibility, Direct File has the potential to save Americans tens of millions of dollars in filing fees in the upcoming filing season, advancing the Biden-Harris Administration’s goal of reducing costs for American families.”
IRS’s verification system Drawbacks
Senators Elizabeth Warren (D-Mass.), Ron Wyden (D-Ore.), and Representative Katie Porter (D-Calif.) are among the legislators who have voiced concerns regarding the verification procedure that taxpayers must go through to access Direct File, notwithstanding the expansion. The three lawmakers expressed their support for Direct File in a letter to IRS Commissioner Danny Werfel and Treasury Secretary Yellen. However, they raised concerns about the use of ID.me as the main identity verification tool. They said that worries regarding the accuracy of the system’s facial recognition technology, particularly when it comes to identifying members of marginalised groups, have caused debate surrounding its use.
The lawmakers noted in their letter that demanding ID.me for identification verification might put certain taxpayers through needless hardship. They pointed out that the people who stand to gain the most from Direct File—lower-income taxpayers attempting to claim tax credits and other benefits—are disproportionately impacted by this impediment.
Warren, Wyden, and Porter stated that “making them use ID.me is creating yet another needless barrier to exactly [the] taxpayers who need Direct File most to claim tax benefits.”
A representative for ID.me defended the technology, saying that their face recognition algorithm has undergone rigorous testing and “has demonstrated 99+% effectiveness across all tested demographics.” The IRS has declined to comment on the lawmakers’ correspondence. The spokesman also emphasised that for people who would rather not utilise face recognition, ID.me provides identity verification alternatives including video chat.
Since ID.me is now the only service that satisfies the Identity Assurance Level 2 (IAL2) standard set by the National Institute of Standards and Technology, the IRS decided to adopt it for its Direct File program. A high degree of security in identity verification procedures is guaranteed by this standard. However, the MPs questioned whether such strict verification procedures were really necessary, especially in light of the laxer regulations governing commercial tax preparation services.
A representative for ID.me defended the technology, saying that their face recognition algorithm has undergone rigorous testing and “has demonstrated 99+% effectiveness across all tested demographics.” The IRS has declined to comment on the lawmakers’ correspondence. The spokesman also emphasised that for people who would rather not utilise face recognition, ID.me provides identity verification alternatives including video chat.
The Congress has asked the IRS to respond to questions about alternate verification techniques it is thinking of using for upcoming tax seasons by October 21. They also questioned whether tax preparation businesses should have to follow the same identity-verification guidelines as Direct File users, and they expressed doubts about ID.me’s overall usefulness.
This proposal to relax verification standards is part of a larger discussion about how to balance accessibility and security in government initiatives, particularly those that support vulnerable and low-income groups. These legislators want to preserve the essential safeguards against identity theft while increasing the accessibility of the Direct File program for the taxpayers it is meant to assist. To that end, they are searching for substitute forms of identification.
