H&R block, other tax-prep firms accused of sharing consumer data with Meta, lawmakers report

Lawmakers in the United States have revealed that H&R Block and several other tax preparation companies have allegedly shared sensitive personal and financial information from tens of millions of customers with Meta and Google.

A recent report from the lawmakers, including Senators Elizabeth Warren (D-Massachusetts) and Bernie Sanders (I-Vermont), detailed their investigation into H&R Block, TaxAct, and TaxSlayer following allegations made by The Verge last year. The initial report claimed that these companies were utilizing code called Meta Pixel to direct data, including users’ income and tax refund amounts, to Meta. The latest investigation reveals that the code collected significantly more information than previously known, including individuals’ names, filing status, adjusted gross income, refund amounts, dependent names, and federal tax owed, among other details.

The lawmakers condemn the sharing of taxpayer information without consent, citing it as a violation of taxpayer privacy laws and individual rights. In a joint letter sent to the IRS, Federal Trade Commission, Treasury Department, and Justice Department, the lawmakers called for a thorough investigation into the matter and the prosecution of any individuals or companies found to have violated the law. Senators Ron Wyden (D-Oregon), Richard Blumenthal (D-Connecticut), Tammy Duckworth (D-Illinois), Sheldon Whitehouse (D-Rhode Island), and Representative Katie Porter (D-California) also joined Warren and Sanders in this demand.

H&R Block responded to CBS MoneyWatch via email, emphasizing its commitment to protecting client privacy and stating that measures have been taken to prevent information sharing through pixels. Meta, on the other hand, claimed that its policies strictly prohibit the transmission of sensitive personal data through their Business Tools. A spokesperson for Meta emphasized that such actions are against their policies, and advertisers are educated on setting up their Business Tools correctly to prevent any unauthorized data sharing. Google, TaxAct, and TaxSlayer did not immediately comment on the allegations.

Coinciding with this investigation is the Internal Revenue Service’s (IRS) endeavor to develop its own free electronic tax-filing system, potentially competing with tax-preparation software offered by companies like Intuit’s TurboTax and H&R Block. The IRS aims to introduce its pilot program in early 2024. The lawmakers’ report highlights that tax preparation and filing is a lucrative industry in the United States, with Americans spending an average of $250 and 13 hours to complete their annual returns. Although free tax-preparation services are available for individuals earning less than $73,000 annually, only a small percentage of Americans actually use this option. The report also notes that H&R Block and other tax-prep companies have invested millions of dollars since the 1990s to oppose the introduction of free filing systems.

Given the findings of the investigation regarding data sharing among tax-prep firms, the lawmakers emphasize the urgent need for the IRS to develop its own online tax filing system. They argue that such a system would safeguard taxpayer privacy and provide a superior alternative for individuals to file their tax returns.