Tax Prep Firms Shared “Extraordinarily Sensitive” Customer Data with Big Tech For Years: Congressional Report
Three major tax preparation companies shared private financial information when filing taxes online with Meta and Google, according to a new report from several congressional Democrats.
The report said Meta was aggressive in using the information it obtained to create advertising that would target users, according to the Associated Press. H&R Block, TaxAct and TaxSlayer were the companies involved, according to the report.
The report said that a bit of code on their websites, called Meta Pixel, shared information that could include income, refund amounts, college scholarship amounts, and the use of health savings accounts.
“On a scale from one to 10, this is a 15,” said David Vladeck, a law professor at Georgetown University and a former consumer protection chief at the Federal Trade Commission, according to CNN.
“This is as great as any privacy breach that I’ve seen other than exploiting kids. This is a five-alarm fire, if what we know about this so far is true,” he said.
The report said data-sharing technology had been in place for many years, up to a decade.
“Big Tax Prep has recklessly shared tens of millions of taxpayers’ sensitive personal and financial data with Meta for years,” the report said, adding that the action “appears to represent a violation of taxpayer privacy laws.”
In a letter to the Internal Revenue Service, Department of Justice, Federal Trade Commission and the Department of the Treasury agency that serves as the IRS watchdog, the lawmakers slammed the businesses, writing that they “should fully investigate this matter and prosecute any company or individuals who violated the law.”
“Tax prep companies shared extraordinarily sensitive personal and financial information with Meta, which used the data for diverse advertising purposes,” the letter said.
The letter said the companies “were shockingly careless with their treatment of taxpayer data. They indicated that they installed the Meta and Google tools on their websites without fully understanding the extent to which they would send taxpayer data to these tech firms, without consulting with independent compliance or privacy experts, and without full knowledge of Meta’s use of and disposition of the data.”
“The Big Tech firms also appeared to act with stunning disregard for taxpayer privacy — failing to provide full and complete information about how they would collect taxpayer data, and what they did — or are doing — with it once it was collected,” the letter said.
“The findings of this report reveal a shocking breach of taxpayer privacy by tax prep companies and by Big Tech firms that appeared to violate taxpayers’ rights and may have violated taxpayer privacy law.”
The letter was signed by Democratic Sen. Elizabeth Warren of Massachusetts, Sen. Ron Wyden of Oregon, Sen. Richard Blumenthal of Connecticut, Sen. Tammy Duckworth of Illinois and Sen. Sheldon Whitehouse of Rhode Island were joined by Sen. Bernie Sanders of Vermont and Democratic Rep. Katie Porter of California.
A TaxSlayer representative said the report “contains numerous false or misleading statements,” according to AP.
H&R Block said it has since taken action to prevent sharing data.
Meta said advertisers “should not send sensitive information about people through our Business Tools.”
“Doing so is against our policies and we educate advertisers on properly setting up Business tools to prevent this from occurring,” it said in an emailed statement.
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