December 14, 2022

Senators Warren, Wyden, Representatives Porter and Sherman Call Out Tax Prep Companies for Sharing of Private Taxpayer Financial Information with Meta, Google

“Tax prep companies should not be able to force taxpayers to give up important statutory protections and remedies just for the privilege of filing their taxes.”

Text of Letters (PDF)

Washington, D.C. — United States Senators Elizabeth Warren (D-Mass.) a member of the Senate Finance Committee, and Senate Finance Committee Chair Ron Wyden, along with Representatives Katie Porter (D-Calif.) and Brad Sherman (D-Calif.) sent letters to tax preparation companies H&R Block, TaxAct, and TaxSlayer, plus big tech firms Meta, and Google, amid reports that the tax preparation companies have been secretly transmitting individual taxpayers’ sensitive financial information to Meta and Google. The information, gathered as Americans file their taxes online, reportedly included data on users’ income, filing status, and refund amounts.

“Such unauthorized disclosures of sensitive taxpayer data would be clearly inappropriate and potentially illegal,” wrote the lawmakers. “The Internal Revenue Code clearly states that ‘returns and return information shall be confidential,’ with limited exceptions.”

Last month, The Markup reported that major tax preparation companies, including H&R Block, TaxAct, and TaxSlayer had been transmitting sensitive taxpayer data to Meta via widely-used code called the “Meta Pixel.”  This code is provided of charge to any business and records users’ browsing history and even information they enter online without their permission, allowing the business to then target them with Facebook ads.

“These shocking reports of breaches of taxpayer privacy by tax preparation companies underscores the need for the IRS to provide its own free tax filing software,” wrote the lawmakers. “American taxpayers should have the option of preparing and filing their taxes directly with the federal government instead of being forced to share private information with third parties that have a long record of abusive behavior, now potentially including turning over that data to Big Tech firms.” 

Meta and Google use data harvested by their software tools not only to understand the habits of internet users, and improve their algorithms, but to drive their profits, including hundreds of billions in advertising revenues. The Meta Pixel reportedly gathered and transmitted highly sensitive taxpayer data without customers’ explicit permission, including names, email addresses, income figures, filing status, refund amounts, health savings account usage, and more. At least one tax preparation company reportedly sent sensitive financial data to Google as well.

The lawmakers are asking H&R Block, Tax Act, TaxSlayer, Meta, and Google to provide answers to explain the nature and extent of this alleged sharing of sensitive taxpayer data no later than January 3, 2023. The lawmakers also sent a letter to Intuit to seek a full accounting of taxpayer data disclosure from all the major tax preparation companies.

The letter was also signed by Senators Tammy Duckworth (D-Ill.), Sheldon Whitehouse (D-R.I.), Bernie Sanders (I-Vt.), and Dick Blumenthal (D-Conn.).

Senator Warren has long fought on behalf of taxpayers to make it easier and safer to file their taxes:

  • In July 2022, Senator Warren led 22 of her colleagues in introducing the Tax Filing Simplification Act of 2022 to simplify the tax filing process for millions of Americans by lowering costs, eliminating red tape for all taxpayers, and saving them hours and hundreds of dollars. 
  • During an exchange of the United States Senate Finance Committee in June 2022, U.S. Treasury Secretary Janet Yellen agreed with Senator Warren on the need to create a free tax filing system that actually works for Americans. 
  • In April 2022, Senator Warren and Representatives Sherman and Porter sent a letter to Intuit regarding the company’s unethical use of the revolving door to hire former regulators to defend their shady business practices that scam taxpayers out of billions of dollars. 
  • In April 2022, Senator Warren and Representative Judy Chu (D-Calif.) sent a letter to Secretary Yellen and IRS Commissioner Charles Rettig expressing concerns about higher IRS tax audit rates for low-income Americans. The lawmakers called on the IRS to cease this unfair practice and asked for information regarding their audit rates on low-income Americans and their plans to make the audit data accessible to the public. 
  • In February 2022, Senator Warren and Representative Pramilla Jayapal (D-Wash.) sent a letter to the Acting Inspector General of the Department of Treasury and the Treasury Inspector General for Tax Administration, calling on them to open an investigation into the unethical revolving door between the world’s largest accounting firms and the Treasury Department and IRS. 
  • In May 2021, Senator Elizabeth Warren introduced the Restoring the IRS Act of 2021, which would provide the IRS with the resources it needs to go after wealthy tax cheats and close the tax gap.