Report: Tax Filing Firms Shared Private Data with Google, Meta

Facts

• According to a report published by a group of lawmakers Wednesday, some of the US' largest tax-prep companies — including TaxAct, H&R Block, and TaxSlayer — shared millions of American taxpayers' personal information with Big Tech, primarily Google and Meta, for years.¹
• The seven-month congressional investigation, led by Sen. Elizabeth Warren (D-Mass.), alleges several tax prep companies shared sensitive private data with Google and Meta using tracking tools without informing customers or receiving their consent — potentially violating federal law.²
• TaxAct, H&R Block, and TaxSlayer have admitted to having shared taxpayers' financial information, including their names, full addresses, emails, and details of deductions or exemptions they were eligible for, among other things.³
• Meta also reportedly confirmed to investigators that it used the taxpayers' private data to serve targeted third-party ads to its Facebook and Instagram users and train its artificial intelligence algorithms.⁴
• The congressional probe follows The Markup's 2022 report, which revealed that tax-filing platforms had been sharing their customers' sensitive financial information with Google and Meta, including filing status, adjusted gross income, and refund amount.⁵
• The lawmakers have called on the IRS, the Treasury Inspector General for Tax Administration, the Federal Trade Commission, and the Department of Justice to investigate the data sharing. Breach of taxpayer privacy laws can lead to fines of up to $1K per violation and a prison term of up to one year.⁶

Sources: ¹Vox, ²CNN, ³Forbes, ⁴Gizmodo, ⁵Ars Technica, and ⁶USA Today.

Narratives

• Narrative A, as provided by Wall Street Journal. The Biden administration must investigate these massive breaches and prosecute anyone who recklessly violates the country's privacy laws. Furthermore, just like it's taking to task the tax filing platforms, Congress must set aside partisan differences to curb the power of Big Tech more generally — primarily by limiting how they collect and use sensitive personal and financial data to power their massive advertising businesses.
• Narrative B, as provided by The Hill. While Big Tech certainly merits harsh punishment if the allegations are true, the probe could pave the way to making the IRS play both the role of the tax preparer and tax collector and expand its purview in search of billion-dollar funding. Before pointing fingers at the tech industry, the government must stop the IRS from leaking confidential data that the federal government forces taxpayers to provide under the assurance that the agency will protect their privacy.
• Narrative C, as provided by The Conversation. Tax filing companies aren't the only ones tracking us. Several artificial intelligence firms, including OpenAI, violate US privacy laws by collecting users' online data without permission. Nothing is foolproof, which is why before cracking down on harmful commercial surveillance or giving a mortal blow to the tax prep companies, the feds must get their act together — if they can't protect users' privacy from tax firms, how can they be expected to regulate the unchartered and booming AI industry?

Predictions