A group of House Democrats are calling for an investigation into major online tax filing companies over their disclosure of personal data of taxpayers to Facebook.
The trio of lawmakers led by Representative Adam Schiff, Democrat of California, have urged the IRS to investigate companies like H&R Block, TaxAct, and TaxSlayer after a report by The Markup in November 2022 indicated that the companies were sending the sensitive data of their users to Facebook.
In addition to sending Facebook personal information including taxpayers’ names, usernames, email addresses, and home addresses, the Markup found companies were also including information on income, filing status, refund status, health savings accounts, and college tuition grants for dependents.
In a letter to Treasury Inspector General for Tax Administration (TIGTA) J. Russell George dated February 2, the lawmakers expressed concern over the potential for misuse and abuse of taxpayers’ sensitive financial information by tax preparers.
“We believe that the American people deserve to know whose personal information was shared with Meta and Facebook, how this was allowed to happen, and what steps the IRS will take to ensure this cannot happen again” wrote the lawmakers. “We strongly urge you to take swift action to thoroughly investigate, take steps to mitigate the harm caused, and protect the rights of American taxpayers.”
The IRS Data Book showed that more than 150 million tax returns were filed electronically in 2021 and millions of taxpayers use online tax filing services such as H&R Block, TaxAct, and TaxSlayer. The findings came on the heels of Meta being found in violation of federal health privacy law after the Meta Pixel gathered sensitive health information from hospital websites.
In addition to calling for an investigation, the members requested the IRS provide answers to the following questions:
- Can you estimate how many taxpayers may have had their data unknowingly shared with Meta and Facebook through e-filing websites?
- Does the IRS know which individual taxpayers’ data was improperly transmitted to Meta, or will this information need to be recovered from the companies?
- The IRS directs taxpayers attempting to file for free to some of the companies reporting found using the pixel via Free File. The IRS also directs taxpayers to Tax Slayer through Volunteer Income Tax Assistance (VITA) sites. Free File and VITA are directed toward low income, elderly, and disabled taxpayers. Can you confirm whether Tax Slayer was one of the software packages embedding the pixel?
- If there is a violation of Section 7216, and tax return information has been disclosed or used by a return preparer without the taxpayer’s consent, will TIGTA issue criminal referrals?
- Does Section 7216 guidance presently ban the use of these pixels from online tax filing service sites or do regulations need to change to specifically prevent the use of this technology?
- What legislative remedies should Congress consider to prevent this from happening again?
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