The Internal Revenue Service plans to migrate its set of online services for tax professionals to the third-party provider ID.me this summer despite objections being raised in Congress to the authentication company.
The IRS said in an email Wednesday to tax professionals that the following products and applications will be impacted:
• Affordable Care Act (ACA) for Transmitter Control Code (TCC); • Application Program Interface (API) Client ID Application;
• e-File Application; • Information Returns (IR) for TCC; • Income Verification Express Service (IVES) Application; • State Applications (State EFIN and TDS State); • TIN Matching, including Bulk and Interactive TIN Matching; • Transcript Delivery System (TDS); • Secure Object Repository (SOR); • Modernized e-File (MeF); and • ACA Information Returns (AIR).
The IRS noted that while the e-Services applications won’t use ID.me until this summer, tax professionals can get ready for the migration and set up an ID.me account now using Tax Pro Account. The transition appears to be timed so it did not interfere with the regular tax season that ended last month.
Even though tax season is officially over now, the agency may get some pushback on that, however. The IRS began using ID.me last November to authenticate taxpayers who wanted to create new online taxpayer accounts as a way to combat identity theft. However, complaints soon arose from privacy advocates about the company requiring taxpayers to use selfies for facial recognition and submit government documents such as passports and driver’s licenses to the IRS (see story).
Those concerns were echoed in Congress, with Republicans introducing a bill to ban the use of facial recognition to authenticate taxpayers (see story). In February, the IRS allowed users to opt out of the facial recognition biometric requirements and instead offer a virtual interview option with agents (see story). The IRS said it would also search for alternatives to ID.me, which is widely used by many state governments and other parts of the federal government.
IRS Commissioner Chuck Rettig was asked by lawmakers at a Senate oversight hearing Tuesday on the IRS budget about the IRS’s plans to transition from ID.me to the federal government’s own Login.gov service, but he noted that Login.gov does not yet have the capacity to handle all the activity that the IRS is used to getting on its online services. However, the IRS is working with Login.gov to improve the authentication service’s capacity.
“We were receiving about a million people a week trying to create online accounts,” said Rettig. “The system we had before had about a 40% authentication rate, so taxpayers who would try to authenticate that, yes, this is Chuck Rettig, but about 60% were not getting into the system and had to walk into a site or call in.”
That was impractical when the IRS was dealing with a backlog of millions of tax returns to process last year. “With ID.me, the authentication rate is far in excess of 70%, both on the biometrics part, which is facial recognition, but taxpayers have the alternative to get online with a live ID.me person,” said Rettig. “Facial recognition is offered in eight different languages. The in-person is offered in more than 30 different languages. We have moved significantly from a service perspective into our multilingual efforts.”
He contrasted that to the current capacity of Login.gov. “Login.gov can handle less than 30 transactions per second,” said Rettig. “We need about 1,500 transactions per second. We need a Level 2 authentication that once this person is in, this is the person.”
The IRS is looking at other alternatives, Rettig noted, while also trying to improve the bandwidth at Login.gov. In the meantime, ID.me will be able to support the suite of e-Services envisioned by the IRS. However, the agency has faced data breaches in 2015 on some of its self-service tools such as Get Transcript and Identity Protection (IP) PIN and needed to shut them down to add better authentication in 2016.
“Some people think that fraud is somebody sitting in their backyard, but we’re up against nation-states,” said Rettig. “We get 1.8 billion cyberattacks per year, so to protect the data that people trust us with, we have to be at a higher authentication level, or not have so many options available.”
The Internal Revenue Service is planning to mandate a new electronic fingerprinting process for e-file applications for tax pros starting Sept. 25.
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