Attacks on Tax Privacy: How the Tax Prep Industry Enabled Meta to Harvest Millions of Taxpayers’ Sensitive Data

Congressional Report: “The investigation revealed that:

  • Tax preparation companies shared millions of taxpayers’ data with Meta, Google, and other Big Tech firms: The tax prep companies used computer code – known as pixels – to send data to Meta and Google. While most websites use pixels, it is particularly reckless for online tax preparation websites to use them on webpages where tax return information is entered unless further steps are taken to ensure that the pixels do not access sensitive information. TaxAct, TaxSlayer, and H&R Block confirmed that they had used the Meta Pixel, and had been using it “for at least a couple of years” and all three companies had been using Google Analytics (GA) for even longer.
  • Tax prep companies shared extraordinarily sensitive personal and financial information with Meta, which used the data for diverse advertising purposes: TaxAct, H&R Block, and TaxSlayer each revealed, in response to this Congressional inquiry, that they shared taxpayer data via their use of the Meta Pixel and Google’s tools. Although the tax prep companies and Big Tech firms claimed that all shared data was anonymous, the FTC and experts have indicated that the data could easily be used to identify individuals, or to create a dossier on them that could be used for targeted advertising or other purposes. 
  • Tax prep companies and Big Tech firms were reckless about their data sharing practices and their treatment of sensitive taxpayer data: The tax prep companies 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. 
  • Tax prep companies may have violated taxpayer privacy laws by sharing taxpayer data with Big Tech firms: Under the law, “a tax return preparer may not disclose or use a taxpayer’s tax return information prior to obtaining a written consent from the taxpayer,” – and they failed to do so when it came to the information that was turned over to Meta and Google. Tax prep companies can also turn over data to “auxiliary service providers in connection with the preparation of a tax return.” But Meta and Google likely do not meet the definition of “auxiliary service providers” and the data sharing with Meta was for advertising purposes – not “in connection with the preparation of a tax return.”…(More)”.