Tax News

Did tax prep firms share data about millions of US taxpayers? Democrats say Yes.

In a world where privacy and data protection are central to individual and business security, recent revelations concerning major tax preparation firms have created a stir. Evidently, in the past two years, three notable tax preparation companies have reportedly transmitted incredibly sensitive information about millions of taxpayers to Meta, the parent company of Facebook.

Breach of Trust: Tax Prep Firms Share Data with Big Tech

It seems, according to reports from congressional Democrats, that this personal and financial information was subsequently used by Meta to generate targeted advertising and to train its own algorithms. The three tax prep companies in question – H&R Block, TaxAct, and TaxSlayer – shared this wealth of information via their tax software, which taxpayers used to prepare their taxes. This information was then accessible to Meta via Pixel code, a tool installed by the tax companies to improve their marketing strategies.

What Did They Share? The News about Meta and Tax Services Companies

You might wonder just how much data was shared by these firms. This includes filing status, income, refund amounts, names of dependents, estimated federal tax owed, user interactions with the tax preparers’ websites, and even the names of text entry forms navigated by the taxpayer. What’s more, it was not only Meta that had access to these sensitive details, but Google as well, through its own tracking tools.

Calling for Action: An Investigation is Needed

This shocking breach of taxpayer privacy prompted seven lawmakers, including Senators Elizabeth Warren, Ron Wyden, Richard Blumenthal, Tammy Duckworth, Bernie Sanders, Sheldon Whitehouse, and Representative Katie Porter, to pen a letter urging federal agencies to investigate this incident. The report was addressed to the heads of the IRS, the Department of Justice, the Federal Trade Commission, and the IRS watchdog.

The lawmakers implore these agencies to investigate and, where laws have been violated, to prosecute the offending companies or individuals. The potential financial liability for the firms implicated could reach into the billions of dollars.

The Defense: Claims and Counterclaims

In response to these alarming revelations, each company had its own defense. TaxAct told The Markup, a nonprofit journalism outlet, that it takes its customers’ data privacy “very seriously” and strives to comply with all IRS regulations. Meanwhile, TaxSlayer refuted many of the statements about taxpayers’ personal and filing information, vowing to request a retraction or correction from Warren’s office. H&R Block has asserted that it has taken measures to prevent sharing information through Pixel coding, and Meta claimed that sending sensitive information through their Business Tools is against company policy.

An Alternative Solution: An Electronic Free-File System

The lawmakers’ report argues for the establishment of a government-run electronic free-file system for submitting tax returns. The IRS is currently piloting such a system, which could help prevent similar breaches of taxpayer privacy in the future.

Your Privacy Matters: Call The Tax Defenders Today

This recent revelation underscores the importance of trust when handling your sensitive tax information. Here at The Tax Defenders, we take your privacy and data protection seriously.

In light of this news, perhaps it’s time to consider partnering with a team of experienced tax professionals who prioritize your privacy. Don’t risk your personal and financial information being shared without your consent. Contact us today at 312-345-5440 for a free attorney consultation. We are here to defend your rights and ensure your data remains confidential.

Who are the largest tax software providers?

Leading the market in tax preparation software in the U.S., TurboTax holds the position as the largest provider. TurboTax is a product of Intuit, a renowned financial software firm also responsible for Mint, a popular personal finance application, and QuickBooks, a comprehensive accounting software platform.

What are three different companies you could use to prepare and file your taxes online?

TurboTax, H&R Block, and TaxSlayer are three top-tier companies for online tax preparation and filing. Each of these providers offers user-friendly platforms, complemented by additional services like mobile tax apps and customer support, designed to streamline the tax-filing process for ease and convenience.

How many people use tax preparation software?

Survey results indicate that nearly half of Americans, specifically 46%, rely on tax preparation software for their tax filing needs. In contrast, 27% prefer a full-service in-person approach, typically engaging with CPAs or tax service agencies for their tax filing processes.

Is H&R Block owned by Intuit?

Contrary to common misconceptions, H&R Block is not owned by Intuit. H&R Block is a trademark of HRB Innovations, Inc., while Intuit, Inc. holds the trademarks for TurboTax and Quicken. These are distinct companies operating independently in the tax preparation and financial software markets.