Three Tax Prep Firms Gave Personal Data to Meta

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Turbotax v IRS Three Tax Prep Firms Gave Personal Data to Meta“3 tax prep firms shared ‘extraordinarily sensitive’ data about taxpayers with Meta, lawmakers say.” That’s the headline over an Associated Press article by Fatima Hussein. My source was KSL in Salt Lake City.

KSL headline Three Tax Prep Firms Gave Personal Data to Meta

I’ll save you some time. The tax prep firms were H&R Block, TaxAct, and TaxSlayer.  Here’s what Ms. Hussein says:

Their report urges federal agencies to investigate and potentially go to court over the wealth of information that H&R Block, TaxAct and Tax Slayer shared with the social media giant.

In a letter to the heads of the IRS, the Department of Justice, the Federal Trade Commission and the IRS watchdog, seven lawmakers say their findings “reveal a shocking breach of taxpayer privacy by tax prep companies and by Big Tech firms.”

Their report said highly personal and financial information about sources of taxpayers’ income, tax deductions and exemptions was made accessible to Meta as taxpayers used the tax software to prepare their taxes.

That 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.

Interestingly, Democrats in Congress issued this report.  Their goal — which I oppose if only because I believe in private enterprise — is to prod the IRS to creating an online tax prep service.

meta logo Three Tax Prep Firms Gave Personal Data to Meta

Think for a minute.  Meta is downright evil.  The three companies should be sued without mercy.  But do you really trust the IRS to do your taxes for you?  Remember, they are the Internal Revenue Service.  Their goal is to extract as much as possible from taxpayers.

A Personal Example

I’ve used TurboTax for my taxes since the 1990s.  One year I printed the forms using a dot-matrix printer.  I thought they were illegible.  The IRS processed them correctly without a hitch.  Today, of course, I file electronically.  I hope everyone noticed that TurboTax was not among the companies that leaked to Meta.

TurboTax is very good about making suggestions to reduce your taxes.  Do you really believe the IRS would do that?

For quite a few years I’ve filed not one but two Schedule C (self-employed income) forms.  The sheer complexity of the tax code makes it virtually impossible for many of us to fill out the forms by hand.  I trust the tax experts and programmers at TurboTax to sort all that out far better than I ever could.

I pay for a TurboTax CD every year.  In the distant past I reviewed tax packages for PC World.  There are many good reasons I’ve stayed with TurboTax over the decades.

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About Tony Lima

Retired after teaching economics at California State Univ., East Bay (Hayward, CA). Ph.D., economics, Stanford. Also taught MBA finance at the California University of Management and Technology. Occasionally take on a consulting project if it's interesting. Other interests include wine and technology.