IRS Mandates Facial Scans for 100M Americans via No-Bid Contract
The Treasury Department bypassed competition to grant ID.me a massive extension. Now, taxpayers must hand over biometric data to a private company for government access.
The IRS handed ID.me a $1.1 billion no-bid contract, forcing 100 million taxpayers to trade their biometric data to a private company to access their own government records.
On January 12, 2026, the Department of the Treasury issued a Justification and Approval (J&A) for a $1.1 billion sole-source contract to ID.me, bypassing standard competitive bidding requirements. Procurement records from SAM.gov show the award was finalized on December 29, 2025, during the high-volume holiday period. The contract locks the Internal Revenue Service into a five-year Identity and Access Management (IAM) extension, tethering over 100 million active taxpayer accounts to proprietary facial recognition software.
IRS Commissioner Danny Werfel oversaw the transition, which cites Federal Acquisition Regulation 6.302-1 to claim ID.me is the 'only one responsible source' capable of meeting the agency’s security needs without 'unacceptable delays.' This justification ignores the existence of Login.gov, the public alternative developed by the General Services Administration (GSA). Despite Login.gov achieving IAL2 compliance—the federal standard for identity assurance—it was sidelined in favor of the private billion-dollar extension.
The financial trail leads directly to private equity. Viking Global Investors, which led ID.me’s Series C funding, stands to see a massive return on investment from this $1.1 billion recurring federal revenue stream. This taxpayer-funded floor bolsters ID.me’s valuation ahead of an anticipated IPO, effectively allowing venture capital firms to exit their positions using public money. By integrating ID.me’s proprietary SDKs deep into the IRS infrastructure, CEO Blake Hall has created a 'technical lock-in' where the agency now frames switching to a public system as a catastrophic operational risk.
Mainstream coverage has largely repeated agency talking points regarding the 'war on fraud,' while omitting critical context. In 2022, congressional testimony revealed that ID.me misrepresented its wait times and its use of one-to-many facial recognition. Rather than facing penalties, the company has been rewarded with a massive funding increase. The IRS’s previous commitment to providing a non-biometric public option has been quietly abandoned in favor of this private monopoly.
For the average person, this represents the establishment of a digital toll booth. Access to essential government services is no longer a right, but a transaction contingent on surrendering sensitive biometric data to a for-profit entity. Your face is now the password to your financial data, and a private corporation holds the keys.
Summary
The Treasury Department bypassed competitive bidding to grant ID.me a five-year, $1.1 billion extension for taxpayer identity verification. This mandate forces 100 million Americans to submit facial scans to a private company to access their own tax records.
⚡ Key Facts
- Treasury bypassed competitive bidding for a $1.1 billion, five-year contract extension with ID.me.
- The IRS cited 'sole source' necessity despite the existence of the GSA’s public alternative, Login.gov.
- The contract was finalized during the 2025 holiday period, avoiding immediate public and legislative scrutiny.
- Viking Global Investors and other venture firms are positioned for a taxpayer-funded exit via an anticipated ID.me IPO.
- 100 million taxpayers must now use proprietary facial recognition to access IRS digital services.
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