ID.me IRS Facial Recognition Update

Under pressure from Congress, the IRS announced it will transition away from using a third-party facial recognition service to authenticate people creating new online accounts, as we mentioned in our article IRS Will Soon Require Selfies to Access Some Features on Their Site . Last year, the IRS began requiring taxpayers to use “ID.me” to access personalized eligibility information for the expanded child tax credits funded by the American Rescue Plan. The agency had planned to expand use of ID.me to all taxpayers later this year.

The use of facial recognition has received criticism on a bipartisan basis from the Senate Finance Committee. Republicans on the Committee sent a letter to IRS Commissioner Chuck Rettig last Thursday, writing: "While we understand the IRS's use of ID.me is intended to protect data and reduce fraud, we have serious concerns about how ID.me may affect confidential taxpayer information and fundamental civil liberties." On Monday, the Democratic chair of the Committee also sent a letter asking the IRS to discontinue the program, writing: “I have long argued that Americans should not have to sacrifice their privacy for security. The government can treat Americans with respect and dignity while protecting against fraud and identity theft. The IRS should take immediate steps to address the many valid concerns that have been raised by taxpayers about its use of facial recognition technology.”

IRS Commissioner Chuck Rettig quickly responded that the IRS would oblige: “The IRS takes taxpayer privacy and security seriously, and we understand the concerns that have been raised,” said Rettig. “Everyone should feel comfortable with how their personal information is secured, and we are quickly pursuing short-term options that do not involve facial recognition.”

To prevent larger disruptions during filing season, the transition will occur over the coming weeks. The IRS plans to “quickly” develop and bring online an additional authentication process that does not involve facial recognition. The transition announced today does not interfere with the taxpayer’s ability to file their return or pay taxes owed. The IRS will continue to accept tax filings and people should continue to file their taxes as they normally would.

About the Author(s)

Sarah N. Gaymon, CPA
Sarah Nicole Gaymon, CPA is a Senior Manager in the Tax Advisory Group at HBK CPAs & Consultants located in the West Palm Beach office providing trust and estate support services for the CPAs in all HBK offices. Sarah’s specialty and focus areas include tax compliance and tax consulting for high net worth individuals, family groups, trusts, estates, and gift tax issues. In addition, Sarah specializes in fiduciary accounting for trusts and estates.

Sarah regularly consults on family wealth, succession and estate planning. She also has experience in US planning and compliance related to foreign trusts, foreign estates, and individual foreign tax compliance and residency issues. Sarah can be reached at 561-469-5492 or by email at sgaymon@hbkcpa.com.

Nicole Vinco
Nicole Vinco is a Senior Tax Associate in the Columbus, Ohio office of HBK CPAs & Consultants. She is a member of the Tax Specialist Group and focuses on tax compliance and consulting for individuals, trusts, estates, and business entities. Prior to joining HBK, she worked for a Fortune 500 company in the Columbus area. Nicole can be reached at 614-228-4000 or by email at nvinco@hbkcpa.com.

Jesse Hubers is a Manager with the HBK Tax Advisory Group in the Naples, Florida office of HBK CPAs & Consultants. He specializes in taxation of corporations and partnerships including formations, reorganizations, liquidations, mergers, acquisitions, and divisions. He also has expertise in like-kind exchanges including deferred exchanges and “drop-and-swap” exchange. Jesse can be reached at 239-263-2111 or by email at JHubers@hbkcpa.com.

Hill, Barth & King LLC has prepared this material for informational purposes only. Any tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or under any state or local tax law or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein. Please do not hesitate to contact us if you have any questions regarding the matter.

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