Democrats Push DOJ to Prosecute Tax Prep Firms’ Big Tech Sharing

Democratic lawmakers want the Department of Justice to investigate and prosecute tax preparation companies they say illegally shared taxpayer data.

Sens. Elizabeth Warren (D-Mass.), Ron Wyden (D-Ore.), Richard Blumenthal (D-Conn.), and Rep. Katie Porter (D-Calif.) wrote to the DOJ earlier this week imploring it to take a closer look at the tax prep companies that shared taxpayer information with big tech firms without the taxpayer’s consent.

A 2023 congressional investigation led by Warren found TaxSlayer, H&R Block Inc., TaxAct, and Ramsey Solutions improperly shared taxpayer information with Meta Platforms Inc. and Google for years.

The letter follows a September report from the IRS watchdog agency, the Treasury Inspector General for Tax Administration, finding consent statements used by four tax software companies didn’t clearly identify the intended purpose and use of the taxpayer data.

“Accountability for these tax preparation companies—who disclosed millions of taxpayers’ tax return data, meaning they could potentially face billions of dollars in criminal liability—is essential for protecting the rule of law and the privacy of taxpayers,” the lawmakers said in the Oct. 18 letter.

The IRS agreed with TIGTA’s findings and said it will confer with the Treasury Department on updating guidance regarding data sharing practices.

The tax prep companies and tech firms have largely defended their practices.

Meta has pointed to its policies for its Business Tool, which require companies to get “all necessary consents” before using its tracking technology.