At average FAANG salaries with overhead (benefits, space, equipment both desk and datacenter/cloud, internal workplace support functions like Recruiting, IT, HR, ER, DEI...) that's 60 people.
That's not many when dealing with multiple massive counterparties. You'll see ratios of non-dev to dev easily 10:1 to 30:1.
Yes, they could genuinely spend $187M so far on a project accomplishing only 2 devs x 5 years worth of work and rework.
The IRS estimated that the average taxpayer spends $240 and 13 hours of time on their taxes. Multiply by 157 million taxpayers and that's $37 billion and 2 billion hours of labor. Although likely skewed by a small % who hire professionals, plenty of people spend $100+ on services like TurboTax.
The IRS spending a couple billion to make the tax process a little bit easier is really not a big deal. $187 million is nothing, and if that's all it costs to streamline their ID verification process, then it means the government is much more efficient with our tax dollars than people give it credit for.