Major tax filing services have betrayed the trust of their customers.
Tax filing services have been giving over sensitive financial information to Facebook.
The information given ranges from names and email addresses to income and filing status information.
This data can be used for advertising.
Major tax filing services such as H&R Block, TaxAct, and TaxSlayer have been quietly transmitting sensitive financial information to Facebook when Americans file their taxes online, The Markup has learned.
The data, sent through a widely used code called the Meta Pixel, includes not only information like names and email addresses but often even more detailed information, including data on users’ income, filing status, refund amounts, and dependents’ college scholarship amounts.
The information sent to Facebook can be used by the company to power its advertising algorithms and is gathered regardless of whether the person using the tax filing service has an account on Facebook or other platforms operated by its owner Meta.
Each year, the Internal Revenue Service processes about 150 million individual returns filed electronically, and some of the most widely used e-filing services employ the pixel, The Markup found.
The investigation also found that someone who is affiliated with the businesses is purposefully going through the data and gathering the parameters – the information is not the default Meta Pixel configurations.
Mandi Matlock, a lecturer at Harvard called it “appalling” saying that the information is “being exploited.”
A deep dive from The Markup and The Verge published this morning explains in detail how some of the country’s most popular tax prep software makers, including H&R Block, TaxSlayer, and TaxAct, utilized the popular Meta Pixel tracking tool to amass sensitive data including names, email addresses, incomes, refunds, filing statuses, and even dependents’ college scholarship amounts from annual filings. Designed and made freely available by Facebook, the code marks a tiny pixel on participating websites that subsequently sends a host of information regarding people’s digital activity to the Meta. Both Meta and businesses that opt-in benefit from the tracking, because it allows them to gather consumer advertiser profiles while personalizing ads to their supposed tastes. Approximately one-third of the 80,000 most popular websites utilize Meta Pixel (disclosure: PopSci included), and overall tracking cookie ecosystem provides the vast majority of revenue for many companies online.
However, The Markup’s most recent investigation into tax filing services’ surveillance presents a particularly egregious and invasive example of data harvesting. For one thing, much of the information amassed by the filing companies aren’t default Meta Pixel configurations, meaning that someone affiliated with these businesses is purposefully going into the settings to toggle specific information gathering parameters. For example, pixels embedded by TaxAct and TaxSlayer used something called “automatic advanced matching,” which scans forms for fields potentially containing personally identifiable information like names, phone numbers, and emails, then sends that information to Meta, according to the report. Mandi Matlock, a Harvard Law School lecturer on tax law, told The Markup that its findings reveal taxpayers are “providing some of the most sensitive information that they own, and it’s being exploited,” adding, “This is appalling. It truly is.”
As the report notes, unfortunately the US financial landscape offers very few alternatives for tax filers other than to turn to these third-party companies. The IRS currently only allows free online tax filing through a governmental portal for people earning $73,000 or less per year. While some private services offer similar free filing, they often obfuscate the option to discourage people from selecting them. The combined result leaves many Americans all-but-forced to pay for these filing services, now with the knowledge that much of their most sensitive data may be harvested by tech companies.
It is time for Congress to rein in Big Tech.