Democrat Lawmakers Demand IRS Answer Key Tax Questions on Data Sharing

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Members of Congress are demanding the Internal Revenue Service (IRS) investigate tax preparation software companies for allegedly sharing taxpayer information with Facebook.

Several news outlets, including The Markup, reported in November 2022 that several services, including H&R Block, TaxAct, and TaxSlayer, sent personal and financial information to Facebook after users filed their taxes. That included filers’ return amounts and information on their dependents, and it was gathered via Facebook parent company Meta.

Specifically, that financial information was transferred to Meta via a widely used code called Meta Pixel, which includes a piece of code that allows users to track visitor activity on a website.

On Thursday, three Democrat lawmakers on the House Ways and Means Committee sent a letter to the IRS to investigate the alleged data-sharing activities between tax filing websites and Facebook.

“The Meta Pixel, operated by Facebook’s parent company, collected taxpayers’ personal information through various tax e-filing websites, including taxpayers’ names, usernames, email addresses, home addresses, income, filing status, refund status, dependents, health savings accounts, college tuition grants, and college scholarship amounts of their dependents,” the Democrats wrote in a news release from Rep. Adam Schiff’s (D-Calif.) office. Reps. Judy Chu (D-Calif.) and Raja Krishnamoorthi (D-Ill.) joined Schiff in issuing the demand.

They now want the IRS to provide answers on if it is aware of the number of taxpayers whose data may have been shared with Meta and Facebook, if the data can be recovered from the companies, and if there is a violation of relevant tax laws.

“The IRS directs taxpayers attempting to file for free to some of the companies reporting found using the pixel via Free File. The IRS also directs taxpayers to Tax Slayer through Volunteer Income Tax Assistance (VITA) sites,” Schiff’s release said. “Free File and VITA are directed toward low income, elderly, and disabled taxpayers. Can you confirm whether Tax Slayer was one of the software packages embedding the pixel?”

By Jack Phillips

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