H&R Block, TaxAct shared sensitive data with Meta and Google, probe finds

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Today we’re spotlighting a new bombshell congressional report that found some tax-preparation companies did more than help you file returns — they also passed data to tech giants like Meta and Google, including details about users’ income and how big their tax refunds were. Here are the key takeaways from the seven-month congressional investigation:

WHAT’S HAPPENING:

• H&R Block, TaxSlayer and TaxAct used a tracking technology embedded in their websites to send the tech industry personal data from tens of millions of Americans, according to a report released today by congressional Democrats and independent Sen. Bernie Sanders.
• The data included information specific to users’ taxes, including details about filing status, adjusted gross income and the size of tax refunds. The report alleges the sites even tracked the buttons users clicked on while filling out their tax forms, which could reveal what tax breaks they claimed or which government programs they use.
• The report says the data practices stretch back years. The three companies stopped using the tracking technology last fall, but the report notes some of them don’t know whether the data they shared continues to be held by the tech platforms.
• Meta told investigators it used the taxpayer data to train its artificial intelligence algorithms and to target third-party ads to users of its platform. Today’s report focuses more on Meta than Google because Google does not appear to have used the taxpayer data to the same extent, a congressional aide tells CNN.

WHAT THE COMPANIES SAY:

• The companies at the center of the investigation told lawmakers the collected data had been scrambled to help protect privacy.
• H&R Block said in response to the report that it takes client privacy “very seriously” and that it’s taken steps to prevent similar data sharing. TaxSlayer and TaxAct did not immediately respond to requests for comment.
• It’s unclear whether Meta knew it may have been using taxpayer data inappropriately. A spokesperson for the tech giant says partner companies are instructed not to use Meta tools to share sensitive information, and that Meta’s system is “designed to filter out potentially sensitive data” if detected.
• Google tells CNN it has policies prohibiting business customers from uploading sensitive data that could be traced back to a person. Google says it’s up to individual sites to control what data they collect and to “inform their users of how it will be used.”

BIG PICTURE:

• Many tax-prep companies have turned to data harvesting as a business model in recent years. The largest among them have spent millions lobbying against new laws that could make it easier for Americans to file taxes on their own. (Next tax season, the IRS will let a limited number of taxpayers try out its own electronic filing service.)
• Experts say the allegations in the new report could expose both the tax-prep companies and the tech firms to legal risk. Government agencies could take a variety of actions, and the companies could also face civil liability.
• The new report again points to the need for a federal law guaranteeing every American a basic right to data privacy, says David Vladeck, a former consumer protection chief at the Federal Trade Commission, the country’s top privacy watchdog. Vladeck says the allegations around taxpayer data indicate the enormity of the problem: “On a scale from one to 10, this is a 15.”

Do you use tax prep services to file your taxes? Are you concerned about your personal information being shared with tech companies? Share your thoughts in the comments.

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