Congressional Report Slams Tax Prep Companies for Sharing Data with Meta and Google
After a Congressional investigation, it has been determined that Meta and Google received sensitive filing data from multiple tax preparation providers. This investigation comes after The Markup’s 2022 report, which exposed the practice of TaxSlayer, H&R Block, and TaxAct utilizing Meta’s Pixel tracking tool to collect information such as filing status, approximate adjusted gross income, refund amount, names of dependents, and the specific text-entry fields users interacted with. Meta is currently facing a lawsuit related to these revelations.
The panel sent its findings to the IRS, FTC, DOJ, and the Treasury General for Tax Administrator (TIGA), directing the agencies to investigate and prosecute as appropriate. “Big Tax Prep has negligently shared the sensitive personal and financial information of tens of millions of taxpayers with Metal over the years without properly disclosing this use of the data or protecting the information and without proper taxpayer consent,” the report reads. “The findings of this report reveal a shocking violation of taxpayer privacy by tax preparation firms and Big Tech companies that appeared to violate taxpayer rights and may have violated the Taxpayer Privacy Act.”
The review found that the Meta Pixel tracker also collected information about “whether taxpayers visited the pages for many revealing tax situations, such as dependents, certain types of income (such as rental income or capital gains), and certain tax credits or deductions.” Additionally, it passed full names, email addresses, country, state, city, zip codes, phone numbers, and gender as hashed values. Information was also collected from taxpayers using TaxActin’s Free File service, a partnership with the IRS.
Congressional investigators listed in the report include Senators Elizabeth Warren (D-MA), Ron Wyden (D-OR), Richard Blumenthal (D-CT), Tammy Duckworth (D-IL), Bernie Sanders (I-VT) and Sheldon Whitehouse. (D-RI) and Rep. Katie Porter (D-CA).
“Tax preparation firms were shockingly negligent in their handling of taxpayer information,” the investigation found. “They stated that they installed Meta and Google tools on their websites without fully understanding the extent to which they would be sending taxpayer data to these technology companies, without consulting independent compliance or privacy experts, and without full knowledge of Meta’s use and use of the data.” The panel blasts Meta and Google for their “staggering disregard for taxpayer privacy.”
The report cites laws that say “a tax return preparer may not disclose or use a taxpayer’s tax return information until he has obtained written consent from the taxpayer,” but notes that tax preparers did not. While tax return companies may legally disclose information to “assistant service providers in connection with the preparation of a tax return,” the panel found that Meta and Google did not meet that definition because the tracking was used for advertising. Violations can result in fines of up to $1,000 per incident (likely pocket money for these companies) and up to a year in jail.
