TurboTax wants you to give up privacy so they can sell your tax return secrets

As Americans file their tax returns, a massive corporate conspiracy is hoping to profit by persuading consumers to give up confidential information with innocuous requests embedded in software after government regulators cracked down on previous violations.

Five major tax preparation companies, including industry giants such as H&R Block, Intuit Inc., and TaxAct, have come under intense scrutiny for their alleged unauthorized use and disclosure of consumers’ confidential data.

The Federal Trade Commission (FTC), in a stern warning issued on September 18, 2023, cautioned these companies that they could face significant civil penalties if they were found to be leveraging personal information collected for tax preparation for unrelated purposes, such as advertising, without obtaining explicit consent from consumers.

Samuel Levine, Director of the FTC’s Bureau of Consumer Protection, emphasized the gravity of the situation, stating, “Consumers trust tax preparers with sensitive information about their finances, marital status, children, and health. Companies that violate Americans’ privacy by seeking to monetize personal data without consent can face significant financial consequences.”

The warning comes in the wake of a report released by U.S. Senators and Representatives on July 12, 2023, following a comprehensive seven-month investigation.

The report, titled “Attacks on Tax Privacy: How the Tax Prep Industry Enabled Meta to Harvest Millions of Taxpayers’ Sensitive Data,” exposed egregious practices by tax preparation firms, revealing extensive sharing of taxpayers’ sensitive personal and financial information with tech giant Meta, the company that owns Facebook.

The investigation uncovered several alarming findings:

• Tax preparation companies utilized computer code, known as pixels, to transmit data to Meta and Google, including sensitive tax return information.
• TaxAct, H&R Block, and TaxSlayer were identified as companies that had been sharing taxpayer data via the Meta Pixel and Google’s tools.
• Despite claims of anonymity, the shared data could potentially be used to identify individuals or create targeted advertising profiles.
• Tax preparation companies displayed recklessness in their data-sharing practices, lacking a full understanding of the extent and implications of their actions.
• The sharing of taxpayer data with Meta and Google for advertising purposes likely violated taxpayer privacy laws.

“The findings of this report reveal a shocking breach of taxpayer privacy by tax prep companies and by Big Tech firms that appeared to violate taxpayers’ rights and may have violated taxpayer privacy law,” wrote U.S. Senators Elizabeth Warren, Ron Wyden, Richard Blumenthal, Tammy Duckworth, Bernie Sanders, and Sheldon Whitehouse, along with Representative Katie Porter.

Tax preparation companies also embedded requests for consent to utilize taxpayer data for advertising purposes within their software, often in a manner that was not transparent to consumers.

This sneaky approach has raised serious concerns about consumer privacy rights and the ethical conduct of these companies.

When TurboTax asks for your permission to “share your data” America’s most popular tax-prep website is conning you to sign away the ironclad privacy protections of your tax return.

The company then earns extra money from showing you advertisements for the next three years for things like credit cards and mortgage offers targeted to your financial situation.

In response to these revelations, consumers are urged to exercise caution and scrutinize any requests for consent to share their tax information for purposes other than filing their returns.

While companies like TurboTax emphasize the benefits of tailored financial advertisements, critics argue that the terms of the data-sharing agreements are often vague and may not represent a fair trade-off for consumers.

As regulatory bodies and lawmakers continue to investigate these allegations, the spotlight remains firmly on tax preparation companies to ensure transparency, accountability, and the protection of consumer privacy rights.

Failure to do so could result in severe penalties and irreparable damage to consumer trust in the industry, but with an army of lobbyists and .

Consumer advocates want regulatory bodies such as the Internal Revenue Service (IRS), the Treasury Inspector General for Tax Administration, the FTC, and the Department of Justice (DOJ), to fully investigate the matter and prosecute anyone found to have violated privacy laws.