Tax Law

The IRS Is Looking Into Using Facial Recognition Technology To Identify Taxpayers And Improve Service

Could this be a less intrusive way to verify identity while allowing the IRS to provide fast service to taxpayers?

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Businessman using using face recognition outdoors

(Image via Getty)

There may come a time when a taxpayer needs their tax information from the Internal Revenue Service. Usually, they need it to qualify for a loan. Or they might want to get detailed information about their tax balances. Unfortunately, the IRS is not known for its speed. To improve customer service, it is proposing to adopt the controversial Facial Recognition Technology (FRT) to verify taxpayers.

Currently, there are a few ways to obtain tax information from the IRS. You can go to the nearest IRS office and obtain them in person. But due to COVID-19, most offices only accept appointments and some can be booked for months. Or you can call the IRS and have them mail the forms to you. But IRS hold times are infamously long, and getting documents by mail can take weeks. Lastly, you can get tax transcripts online through the IRS website. But you must first create an online account. To do so, you must answer questions about your past and the numbers you reported on your most recent tax returns. Most people don’t remember the numbers they reported on their income tax returns, and some prefer not to remember. So some might have difficulty obtaining this information.

While inconvenient, the IRS must take these precautions in order to protect taxpayers from identity theft. The IRS is a prime target for hackers because they can use taxpayer information to steal tax refunds and commit identity theft. Or they just want to cripple the federal government.

Could there be a less intrusive way to verify identity while allowing the IRS to provide fast service to taxpayers?

Earlier this year, there were rumors that the Internal Revenue Service would be using facial recognition technology (FRT) to verify the identity of taxpayers. This drew criticism from both the public and lawmakers, who cited privacy concerns. As a result, on February 7, 2022, the IRS announced it will transition away from using FRT to help authenticate people creating new online accounts. Instead, the IRS will bring online an additional authentication process that does not involve facial recognition.

But on February 21, the IRS announced that it will give taxpayers the option to verify their identity either through the use of biometric verification (including FRT), or sign up for an online account which does not require facial recognition but will require a virtual interview.

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Use of FRT has increased in recent years. People use it to access their computers or smartphones instead of having to input a password or a PIN. People have used apps that superimpose their face onto movie scenes. Retail stores are using them to identify shoplifters and troublemakers.

But FRT isn’t perfect. There have been studies showing that facial recognition tools tend to discriminate against minorities. There are also accusations that retail stores using FRT in their cameras has misidentified minorities, particularly among darker-skinned individuals.

Also, there is a segment of the population that does not have access to computers with FRT either due to cost or not needing to upgrade their Commodore 64s. This includes the elderly and the homeless.

Another reason why some people are suspicious of FRT is the threat of cyber attacks. So far, it does not appear that any large entity is fully protected from hackers who want to steal your contact information so they can let you know about your car’s extended warranty. Someone resourceful and determined enough will probably find a way to break the code. Or someone from the inside may pull a Snowden and leak the files.

Lastly, there is the concern about privacy. While there are people who willingly give their personal information to companies to use their services, the attitude changes when the government is involved. The government has the power to imprison people, seize assets, pass laws that can decimate livelihoods, and do other things that can make life miserable. The IRS specifically has very broad investigatory powers. They can issue summons to obtain financial records and can contact third parties, which could damage relationships. For the little guy, they are almost impossible to challenge. People might be wary about voluntarily disclosing information because a few bad apples might be tempted to use and abuse these awesome powers to achieve objectives by any means necessary. Others see this as being one step closer to a dystopian society where the government sees everything you do.

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While FRT still has problems, the government will have to balance the negative effects with the potential to improve customer service. For example, while FRT can be improved to better identify people of color, there is a clear difference between being unable to access website information as opposed to being harassed by a store manager or a law enforcement officer. Should those who are identified correctly be denied a more convenient way to obtain their tax information because it disproportionally affects others?

For now, taxpayers have a choice as to whether they want to allow the IRS to verify their identity through FRT or another way. Perhaps this might be the best temporary solution until the recognition technology improves and everyone has the opportunity to use the service.

Steven Chung is a tax attorney in Los Angeles, California. He helps people with basic tax planning and resolve tax disputes. He is also sympathetic to people with large student loans. He can be reached via email at stevenchungatl@gmail.com. Or you can connect with him on Twitter (@stevenchung) and connect with him on LinkedIn.

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