This has become standard practice for identity verification with financial applications. Probably better than having a thief get into your tax account and divert a refund to their bank account. I had to do this about a month ago on another site, and the AI that does the initial screening didn’t believe it was me - I look older than my last license photo - so they had to move it over for a manual verification by a human, which went smoothly.
Better for them sure, but hell for users.