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Unveiling the Massive Taxpayer Privacy Breach: Senators Demand DOJ Probe

News | Jul 20, 2023

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In a shocking revelation, a group of Democratic senators, including Elizabeth Warren (Mass.) and Finance Committee Chair Ron Wyden (D-Ore.), have called for a Justice Department investigation into several tax preparation companies H&R Block, TaxSlayer, and TaxAct

The senators' demand follows their investigation that concluded these companies shared extensive personal and financial information of taxpayers with Meta, the parent company of Facebook, and Google.

The senators have accused H&R Block, TaxSlayer, and TaxAct of embedding "pixels" in their websites, a code that allowed the sharing of sensitive tax data with Meta and Google. This data included information such as federal taxes owed, filing status, and names of dependents.

Meta reportedly used the data obtained from tax preparation services for targeted ads and to train its AI algorithm.

The accused companies have since claimed to have stopped the tracking software.

This controversy emerges amidst Democrats' ongoing battle with the tax preparation industry over an IRS plan. The plan involves setting up a pilot program next year that would allow some people to bypass these companies and file their returns online for free directly with the IRS.

In response to the allegations, a spokeswoman from H&R Block stated, "H&R Block takes protecting our clients’ privacy very seriously, and we have taken steps to prevent the sharing of information via pixels."

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In addition to the Justice Department, the senators have also urged the IRS, the agency’s inspector general, and the Federal Trade Commission to investigate the matter and prosecute any company or individuals who violated the law. The report pointed out that under the law, "a tax return preparer may not disclose or use a taxpayer’s tax return information prior to obtaining a written consent from the taxpayer," — a rule that was not followed when the information was turned over to Meta and Google.

This incident underscores the urgent need for stringent data privacy laws and the importance of holding companies accountable for their actions. As the investigation unfolds, it will be crucial to monitor the steps taken by these companies to ensure the protection of taxpayer information and privacy.

The Senators:

"[This is] shocking breach of taxpayer privacy by tax prep companies and Big Tech firms that appeared to violate taxpayers’ rights and have violated taxpayer privacy law."


NCFA Jan 2018 resize - Unveiling the Massive Taxpayer Privacy Breach: Senators Demand DOJ ProbeThe National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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