Leading tax preparation companies faced yet another warning after lawmakers issued a reportearlier this year criticizing major tax preparers for allegedly providing personal information to companies like Meta and Google.
Following the issuance of the July 2023 report, the Federal Trade Commission warned five companies - H&R Block, Inc., Intuit Inc., TaxAct, Inc., TaxSlayer LLC, and The Lampo Group, LLC - that they could face civil fines. The government said the companies' acts and practices were found to be a violation of the FTC Act.
This week, six Democratic senators and a member of the House sent a letter to the companies requesting an update on whether they have changed their policies.
"The FTC’s warning followed the release of our months-long investigation revealing that major tax preparation companies sent tens of millions of Americans’ sensitive personal data to Meta without providing appropriate disclosures or obtaining taxpayer consent—in apparent violation of taxpayer privacy laws.," the lawmakers wrote this week. "Accordingly, we write to confirm that, in accordance with the FTC’s notice of penalty offenses, your company is not engaged and will not be engaged in any further abuses of taxpayer privacy."
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The report accused the companies of "recklessly" sharing personal information of millions of taxpayers. It added that tax prep firms were "shockingly careless" with the data.
The lawmakers said the tax prep companies may have violated the law by allegedly mishandling sensitive tax information.
The report says that tax preparation companies used computer code, known as pixels, to transmit personal data to Meta and Google.
The report indicated Google was able to acquire taxpayers' filing status, adjusted gross income, approximate refund amount and names of dependents through TaxAct. Google could match that information with names, addresses and phone numbers.
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This process will eventually expand to more users and could be an alternative to private tax services like H&R Block or Turbo Tax.
The report says Meta was able to get information from H&R Block and TaxSlayer on pages taxpayers used for many revealing tax situations, including having dependents or certain tax credits. Although the companies said this data was anonymous, the Federal Trade Commission determined this information could be sourced, the report stated.
TaxSlayer has disputed what is in the report.
"TaxSlayer explicitly stated in our written and oral responses to Congress that to the best of our knowledge, neither the Meta Pixel or Google Analytics Pixel transmitted social security numbers, addresses, filing status, income, adjusted gross income, deductions, refunds owed, taxes owed, health savings information, Form 1040 or other tax forms, or other sensitive information from tax returns," the company said. "Contrary to the report, we also never stated that the Meta Pixel transmitted information about which tax forms on which customers entered information, or that page information provided sensitive data such as taxpayer rental income or alimony."
The report added that Meta used this data to target ads to taxpayers.
Following the issuance of the July 2023 report, H&R Block released the following statement to Scripps News: "H&R Block takes protecting our clients’ privacy very seriously, and we have taken steps to prevent the sharing of information via pixels," the company said.
