Alabama is launching a pilot program this year that will allow residents to more “securely” file their taxes by using an app that verifies their identity with a selfie. Those who try it out are promised faster processing and a quicker return. As tempting as that is, you probably shouldn’t do it.
Hackers and identity thieves love tax season. It’s a time of year in which they can buy or sell Americans’ personal information that’s then used to fraudulently file taxes and collect the refunds. In 2013, the US government paid out $5.8 billion in fraudulent returns and it has already lost $30 million this year in a hacker orchestrated student loan scam. So, it makes sense that Alabama wants to try out this new system to help prevent those crimes from occurring.
The app that has been chosen for the flagship program is called eID and it asks users to verify their phone number, scan the barcode on the back of their driver’s license, scan the front of the license and take a moving panorama selfie. The selfie is then compared to the state’s database and your app is activated. When the time comes to use a service that requires eID, the user opens the app, scans a QR code and takes another selfie to verify their identity.
Will this make it more difficult for criminals to file fraudulent tax returns? Most likely, at least in the short term. But also realize that your information and detailed scans of your face are also going into a database that could one day be hacked. Every company is vulnerable to hacking at some point or another. On the app developers website, there’s a sentence that reads, “Currently the eID is being tested to secure online tax refunds, however, over time, the eID can be used to facilitate secure online transactions, like applying online for benefits, travel and more.” Here’s what comes up when you click the link:
Other links on the page aren’t even links, they do nothing. Does this seem like a meticulous company that focuses on getting all the details right?
But there’s more to consider. A report from October found that the FBI now has 117 million American’s photos in its facial recognition database. That database has been in development for years and is a major source of controversy among privacy advocates. Guess who built that database? Yup, MorphoTrust, the same company that built the eID app. They also built and maintain the facial recognition databases for the Department of State and the Department of Defense. (pdf link) Can’t imagine a nightmare scenario in which those databases get crossed, nope.
One has to ask themselves if they want to give more detailed facial information to this company. The upside could be more accurate recognition technology, so maybe you won’t end up like some of the poor souls who have been misidentified by the system.
If you’re concerned about tax fraud, your best bet is to follow the advice of Haywood Talcove, CEO of LexisNexis’ government risk solutions unit. He tells CNET, “The best thing, the only thing the consumer can do to protect themselves is to file very early.”