Mark Zuckerberg's Meta has been collecting the personal information of tens of millions of Americans from three major tax-prep companies. A new report presented by Senate Democrats shows that Meta has been gathering personal financial information from individual tax returns done with H&R Block, TaxAct and TaxSlayer.
A probe led by Democratic Sen. Elizabeth Warren has found that the tax prep companies had potentially violated privacy laws by sharing taxpayers' sensitive personal and financial data with Meta for years. Violating taxpayer privacy laws can lead to fines of up to $1,000 per violation and up to one year in prison.
The privacy breach was first reported last year by the nonprofit journalism outlet The Markup.
This explains why and how Zuckerberg can run manipulative and targeted ads to Facebook and Instagram users. He has the necessary information to know how much you earn and how much you can afford to spend.
Meta uses taxpayer information for targeted advertising
The data came to Meta through its Pixel code, which the tax firms installed on their websites to gather information on how to improve their own marketing campaigns. In exchange, Meta was able to access the data to write targeted algorithms for its own users.
The Markup's report in November revealed that the tax prep companies shared information like names, email addresses, income, filing status, refund amounts and dependents' college scholarship amounts through Meta Pixel.
H&R Block, Tax Slayer and Tax Act traded the supposedly private financial information to Zuckerberg to improve their quality of advertising online. Meta then used the personal information to write advertising algorithms even more directly targeted to users.
"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 report revealed that TaxAct allowed Meta to collect even more data than initially reported, including approximate federal tax owed and tracked buttons clicked and names of text-entry forms that could indicate whether taxpayers were eligible for certain deductions.
According to the three companies, they have removed or disabled the Meta Pixel from their websites following The Markup's report in November.
"H&R Block takes protecting our clients' privacy very seriously, and we have taken steps to prevent the sharing of information via pixels," spokesperson Heather Woodard said in an emailed statement.
A statement from TaxAct said the company has "always complied with laws that protect our customers’ privacy" and is "committed to engaging with stakeholders to address any concerns and to help advance public policy."
TaxSlayer did not immediately respond to a request for comment.
Warren and the other lawmakers leading the probe called on enforcement agencies like the Internal Revenue Service (IRS), the Treasury Inspector General for Tax Administration, the Federal Trade Commission and the Department of Justice to investigate the data sharing and "prosecute any company or individuals who violated the law."
The lawmakers said the investigation highlights the need for the IRS to develop its own online tax filing system "to protect taxpayer privacy and provide a better alternative for taxpayers to file their returns."
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