Taxpayers who used TaxAct, H&R Block or TaxSlayer to file their tax returns may have personal information shared with tech giants like Meta and Google, he said. A congressional report released Wednesday.
An investigation led by Democratic Sen. Elizabeth Warren found that tax preparation firms violated privacy laws by sharing tens of millions of taxpayers’ sensitive personal and financial information with Facebook’s parent company Meta over the years. The breach of privacy It was reported for the first time last year At The Markup, a non-profit journalism organization.
The companies said they have used metapixel code to track website visitors for “at least a number of years.” All three have also long shared data through Google Analytics, but a A Warren aide told CNN. The report is more focused on Meta because Google “does not appear to have used the data as clearly as Meta for its own commercial purposes.”
The investigation reveals a “disturbing pattern” of information sharing by tax prep firms, the report said. “Most websites use pixels, especially online tax preparation websites, so it’s a no-brainer that they use them on websites where tax return information is entered.”
What kind of data is shared?
In Markup’s November report, the companies shared information such as names, email addresses, earnings, delivery status, refund amounts and dependents’ college scholarship amounts via Meta Pixel. Taxpayers who use the Tax Act’s Free File Service, a partnership with the Internal Revenue Service, have shared their information with technology companies.
“Each taxpayer could have shared at least some of the information they used to file their taxes,” the congressional report said.
Wednesday’s report allows the Tax Act to collect more data than Meta reported, including estimated federal tax liability and tracked keys and input forms that indicate whether taxpayers qualify for certain deductions.
All three companies said they removed or disabled meta pixels from their websites after the markup report was published, according to the report.
“H&R Block takes our customers’ privacy seriously, and we have taken steps to prevent the sharing of information by Pixel,” spokeswoman Heather Woodard said in an emailed statement.
A statement from the Tax Act said the company “always complies with laws that protect our customers’ privacy” and is “committed to engaging with stakeholders to address any concerns and advance public policy.”
TaxSlayer did not immediately respond to a request for comment.
How to use the information?
While the companies say the data shared is anonymous, the report said it could “easily” be used to identify individuals or create a dossier that could be used for targeted advertising or other purposes.
Meta said it used the taxpayer data to target ads and train an AI algorithm.
“We have made it clear in our policies that advertisers should not send sensitive information about people through our business tools,” Meta spokesman Emil Vazquez said in an emailed statement.. “Doing so is against our policies and we advise advertisers to properly set up business tools to prevent this from happening. Our systems are designed to access sensitive information.”
Google spokeswoman Angela Krieger said the company has policies and technical features that prevent Google Analytics from collecting personally identifiable information about customers.
“Site owners — not Google — are in control of what data they collect and should inform their users about how it’s used,” Krieger said in an emailed statement. “Additionally, Google has strict policies against advertising to people based on sensitive information.”
What happens next?
Warren, who led the investigation, and other lawmakers called on the IRS, the Treasury Department’s inspector general for tax administration, the Federal Trade Commission and the Justice Department to investigate data sharing and “prosecute companies or individuals who violate the law.” He said.
The report notes that violations of taxpayer privacy laws are punishable by fines of up to $1,000 and up to one year in prison per violation.
The lawmakers said the investigation showed the IRS needed to maintain its own online tax filing system “to protect taxpayer privacy and provide taxpayers with a better option for filing their returns.”
The IRS is preparing to launch a government-sponsored online tax filing pilot program next year, after a survey found that 72 percent of taxpayers would be “very interested” or “somewhat interested” in using free e-tax. File system from the IRS.
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