Democrats urge DOJ to take legal action against tax preparation companies that allegedly shared user data with Meta and Google.
It is claimed that companies shared taxpayer information with Meta and Google using tracking pixels.
A group of Democratic lawmakers is urging the Department of Justice to hold tax preparation companies accountable for allegedly sharing user information inappropriately with Meta and Google through their advertising pixels. Senators Elizabeth Warren (D-MA), Ron Wyden (D-OR), Richard Blumenthal (D-CT), and Representative Katie Porter (D-CA) have called for action against these companies for failing to protect taxpayer privacy.
In a recent letter, the lawmakers reaffirmed their earlier request for authorities to investigate these companies. This incident is the latest in a series of developments that began after the release of a 2022 report revealing how tax preparation companies were sharing financial information through a common code known as a pixel. One of the implicated companies stated at the time that it was unaware that such information was being shared and disabled the pixel.
The lawmakers' reaction prompted a congressional investigation, followed by an audit from the Treasury Inspector General for Tax Administration (TIGTA). The results of this audit were released last month, and the senators claim that they confirm their own findings, which were made public in July 2023. The lawmakers' investigation included TaxSlayer, H&R Block, and Tax Act, and it was also found that the code was present in the software provider Ramsey Solutions.
The TIGTA report does not mention individual tax preparation providers but indicates that its review of "four tax software companies" found that they did not comply with a Treasury regulation designed to protect taxpayer privacy. Although the companies obtained taxpayer consent to disclose information about their tax returns, they did not clearly identify the specific reason for requesting that consent or who would receive that data.
Furthermore, the Inspector General pointed out that federal guidelines on how to obtain taxpayer consent do not specifically address the use of pixels and recommended that the Internal Revenue Service (IRS) update its procedures to include them.
The lawmakers assert that it is now the responsibility of the Department of Justice to enforce the relevant criminal laws. In their letter to the DOJ, they note: "Penalties for intentionally or recklessly disclosing or using tax return information include up to one year in prison and fines of up to $1,000 per violation." The senators emphasize that holding these tax preparation companies accountable for disclosing the tax information of millions of taxpayers is essential to upholding the law and protecting taxpayer privacy. They urge the DOJ to follow the facts and conclusions of the TIGTA and the IRS and to take appropriate action against any company or individual that has violated the law.