The question of just how secure taxpayers' data is arose yet again in late October, when a group of U.S. lawmakers followed up with major tax preparation companies on whether they've "heeded the warning by the Federal Trade Commission, which told the companies in September they could face billions of dollars in fines if it turns out they violated their customers' privacy," CNN Business reported.
This warning followed a congressional investigation that found tax prep companies, including TaxSlayer, H&R Block, and TaxAct, had "sent names, phone numbers, email addresses, and income tax information to Facebook and Google," The Week wrote in July. Once that data was passed along, it was "likely used for advertising and AI training purposes, with Google and Meta Platforms tailoring ads to taxpayers based on their personal information," per Investopedia.
According to the congressional report, there's reason to believe that "every single taxpayer who used their websites to file their taxes could have had at least some of their data shared." Here's what you can do going forward to help keep your sensitive information more secure.
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1. Think twice before clicking 'yes'
According to The Washington Post, "you do have a choice" when it comes to whether you share your information when filing your taxes online. As the Post explained, if you simply click 'no' when asked if you'd like "personalized service" or "offers," the tax prep company "will still complete your taxes."
Opting out might be a practice you consider beyond just tax filing. As the Post noted, "the golden rule of privacy is, the fewer hands that can access your data, the safer you are."
2. Remember it's not too late to revoke access
If you've already gone ahead and clicked yes, take-backs are allowed. According to the Post, "if you agreed to these requests while preparing your taxes and have now changed your mind, you can try to revoke access."
To undo your previous agreement, however, the company is "going to make you jump through some hoops," per the Post. The exact method will vary depending on the company, though in general, you'll need to contact the company directly with your request.
3. Read up on privacy policies
What exactly should you be looking for? The tax software site "should guarantee that it uses the most secure technology available," said The Balance. And if you're filing a state tax return electronically, check that "the tax software information includes the same security for state tax agencies."
4. Make sure you're using a secure network and device
Another thing that can throw a wrench in your data security when e-filing is using an unsecured network. As GoBankingRates explained, even if a website itself is secure, "when using a public internet connection at a library or a coffee shop, for example, other people might be able to see what you’re sending."
You'll similarly want to take steps to ensure your computer and phone stay secure, which requires installing the latest updates. "Most applications, when they're compromised, are not compromised by scary zero-day bugs that nobody knows about. They are compromised by problems that everybody knows exist that have been publicly reported, and that the company has fixed and they have issued a patch in their security update," Eva Galperin, director of cybersecurity at the Electronic Frontier Foundation, told NPR.
5. Bolster your password strength
While this won't help if the website itself is sharing your data, you can keep your information out of the hands of hackers by making an effort to use strong passwords. Use a unique password for each website, and "bring some randomness and special characters into it," advised NPR. You might even consider turning on two-factor authentication for accounts that are especially important, which is when you're asked to confirm your login through a second factor, like a text message or an app on your phone.
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