Lawmakers say tax prep companies illegally shared taxpayer data with Meta and Google

Sen. Elizabeth Warren (D-Mass.) is leading a group of lawmakers calling for an investigation into how some of the largest tax prep companies allegedly illegally shared sensitive customer data with Google and Meta, CNBC reported.

A seven-month congressional investigation found evidence that TaxSlayer, H&R Block, TaxAct, and other tax prep firms sent names, phone numbers, email addresses, and income tax information to Facebook and Google. Due to the tracking technology used by the companies, "every single taxpayer who used their websites to file their taxes could have had at least some of their data shared," the report said. The lawmakers presented their findings in a letter to Attorney General Merrick Garland, Federal Trade Commission Chair Lina Khan, IRS Commissioner Daniel Werfel, and Treasury Inspector General for Tax Administration J. Russell George. The investigation was opened after a joint story from The Markup and The Verge initially exposed the data sharing in November 2022.

Lawmakers allege that tax prep companies already shared the personal information of tens of millions of Americans without their consent. They also found they were sharing taxpayer data, such as their filing status, gross income, and tax refunds. "On a scale from one to 10, this is a 15," Georgetown University law professor David Vladeck told CNN. The allegations are "as great as any privacy breach" he'd ever seen and would be "a five-alarm fire" if proven true.

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During the investigation, Meta admitted to using the taxpayer data it received to target third-party ads and train its algorithms, the report found. One of Warren's aides told CNN that it wasn't clear if the company behind Facebook knew it was inappropriately using data. A Meta spokesperson said the company prohibits using its tools to share sensitive information and that its systems are "designed to filter out potentially sensitive data it is able to detect."