Some members of Congress are calling on the IRS to reevaluate its current identity verification standards as the agency seeks to expand its free online tax preparation service. These politicians feel that the present technique, which uses ID.me, may be too limiting for many filers, therefore they are pushing for the IRS to offer other means for taxpayers to verify themselves.

In 12 states, the IRS is already testing its Direct File program, a free way to file taxes. The Treasury Department has announced that this trial run, which was started for the 2023 tax season, 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 expansion seeks to make it available to 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 2024 forms. The goal of the program is to give a free substitute for the commercial tax preparation services provided by firms such as H&R Block and Intuit, which runs TurboTax. “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,” said Treasury Secretary Janet Yellen, underscoring the program’s potential financial benefits.

The possible drawbacks of the IRS s verification system

Despite the expansion, some lawmakers have voiced concerns about the verification procedure that taxpayers must go through in order to utilize Direct File, including Senators Elizabeth Warren (D., Massachusetts), Ron Wyden (D., Oregon), and Representative Katie Porter (D., California). The three lawmakers expressed their support for Direct File in a letter to Treasury Secretary Yellen and IRS Commissioner Danny Werfel, but they also questioned the use of ID.me as the main identity verification tool. According to them, the system’s use of face recognition technology has generated controversy because of doubts about its accuracy, especially when it comes to identifying members of underrepresented groups.

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 same 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 obstacle.According to Warren, Wyden, and Porter, requiring people to use ID.me is putting yet another unnecessary obstacle in the way of [the] folks who need Direct Filemost to obtain tax advantages.

A representative for ID.me defended the technology, claiming that their face recognition system has been thoroughly tested and has shown 99+% effectiveness across all tested populations, even though the IRS has failed to comment on the MPs’ correspondence. The representative also emphasized that for people who would rather not utilize face recognition, ID.me provides alternative methods of identification verification, such video chat.

Since ID.me is now the only service that satisfies the National Institute of Standards and Technology’s Identity Assurance Level 2 (IAL2) standard, the IRS decided to use it for its Direct File program. A high degree of security is guaranteed in identity verification procedures by this standard. The parliamentarians, however, questioned the necessity of such strict verification procedures, especially in light of the laxer requirements placed on commercial tax preparation services.

In their letter, they accused the IRS of using a double standard, arguing that commercial tax preparation firms ought to be held to the same standards if the danger of fraud and identity theft is significant enough to necessitate thorough verification for Direct File. On the other hand, the IRS should reevaluate whether Direct File customers must go through the more onerous verification process if the threat is not considered serious enough for private enterprises to implement such precautions.

Regarding alternate verification techniques the IRS is thinking about using for upcoming tax seasons, the lawmakers have asked the agency to respond by October 21. They also questioned whether business tax preparation services need to be subject to the same identity-verification requirements as Direct File customers, as well as the general usefulness of ID.me.

This proposal to loosen verification standards is part of a larger discussion about how to strike a balance between security and accessibility in government initiatives, particularly those that support vulnerable and low-income groups. These lawmakers aim to preserve the essential safeguards against identity theft while increasing the Direct File program’s accessibility for the taxpayers it is meant to assist by looking for alternate forms of identification.