U.S. tax prep companies allegedly shared taxpayers' healthcare data with Meta and Google

A group of democratic lawmakers has urged the U.S. Department of Justice to investigate and prosecute several prominent tax preparation companies for sharing taxpayer data with Meta and Google.

 

In a letter sent to the DoJ, senators Elizabeth Warren, Ron Wyden, and Richard Blumenthal, along with representative Katie Porter, said that in September, the Treasury Inspector General for Tax Administration, or TIGTA, released an audit report stating that four online tax preparation companies have shared the sensitive personal information of taxpayers including their tax return information “with Big Tech firms” without obtaining clear and precise user consent.

 

“The report found that consent statements being used by the tax prep companies did not clearly identify the intended use of taxpayer data, a violation of Treasury regulations. The IRS agreed with TIGTA’s assessment,” reads a press release by senator Elizabeth Warren.

 

According to the letter, a July 2023 Congressional investigation revealed that TaxSlayer, H&R Block, TaxAct and Ramsey Solutions used “pixels” on their website to track customers and harvest their data.

 

“Tax prep companies used pixels, computer code that tracks a user’s website activity, to obtain sensitive personal and financial information, including approximate income and refund amounts, for millions of taxpayers who filed their taxes online with these companies. Meta then used that information for advertising and to train its AI algorithm,” senator Warren added.

 

TIGTA audited the allegations brought against the companies and in a September 17 audit report, it said that the companies did not obtain proper taxpayer consent before sharing their data.

 

“In line with your commitments to prioritize enforcement of white collar and corporate crime, you must act without delay,” reads the letter sent to the DoJ.

 

“The penalties for knowingly or recklessly disclosing or using tax return information includes up to 1 year in prison and penalties of up to $1000 per violation. DoJ has the sole authority to enforce the criminal statute on behalf of the millions of taxpayers harmed by this unauthorised disclosure of their sensitive personal and financial data.”