I'm sure the IRS make it very painful to not register with this 3rd party. But probably not impossible. At least for a while. I'll make my decision to join when the pain of not joining is higher than the pain of doing it the old/alternative way.
I wonder how many people actually read the terms. According to Brian Krebs, the privacy policy says you can delete your biometric data, but when he tried, he was led to a process to delete his account. So certainly if you have an active account, your biometric data is in the juicy hacker target at id.me. Even if you delete your account, in the fine print, they say they company can keep your biometric data for seven and a half years. I'm not sure if that's a correct interpretation or not, and I don't want to be one of those people who spend 10 minutes reading the first 3 links on Google results, then proclaim to know "the truth"
All I can say is I won't be part of the massive id.me breach unless they make it too painful to not join, which hasn't happened yet. After all, if the IRS can mail me a letter, I can also mail them a letter, right? That's what I've been doing 'forever'.