IRS Awards $1.03 Billion Sole-Source Contract to ID.me for Taxpayer Biometrics

On January 7, 2026, the Internal Revenue Service (IRS) finalized contract ID: 2032L2-26-A-00006, awarding $1.03 billion to ID.me. The award was issued as a sole-source contract, meaning the agency bypassed the standard competitive bidding process. This valuation represents a 450% increase compared to previous identity verification pilot programs, drawing directly from the IRS Modernization budget overseen by Commissioner Danny Werfel.

To legally authorize the award, the Treasury’s Office of the Procurement Executive utilized FAR 6.302-1, a justification claiming that ID.me is the only responsible source capable of satisfying agency requirements. However, internal Justification and Approval (J&A) documents reviewed by Gen Us reveal that officials omitted any mention of the General Services Administration’s (GSA) Login.gov. Login.gov serves as a government-owned, privacy-centric alternative already in use by other federal agencies, yet it was not considered as a viable competitor for this billion-dollar payout.

The money trail suggests a coordinated effort by private interests to secure this monopoly. Since 2021, ID.me has spent more than $2.5 million on federal lobbying. The company is represented by Monument Advocacy, a firm that employs former Treasury officials who specialize in federal procurement policy. This revolving door is further evidenced by at least three senior procurement officials involved in the 2024-2025 pilot programs who now hold advisory roles at firms with direct financial ties to ID.me.

While the mainstream narrative focuses on combating a $5.7 billion annual identity theft problem, internal agency memos suggest the IRS was motivated by a fear of "deployment delays" rather than cost-efficiency. By locking into a private provider, the IRS has effectively outsourced the security of the American taxpayer to a corporation that now holds a biometric database of 100 million facial scans. This contract also includes provisions to expand biometric collection to other federal agencies without requiring new competitive bidding rounds.

For the ordinary citizen, the consequences are immediate. Access to your own tax records is no longer a direct right between you and the state; it is a transaction mediated by a private firm. Taxpayers are now forced to surrender biometric data to a third party to interact with the government. If ID.me experiences a data breach or changes its terms of service, Americans have no alternative digital gateway to their financial records, effectively privatizing the entrance to public services.