Pluralistic: 22 Nov 2022 Tax prep services send sensitive financial info to Facebook

Today's links

An H&R Block storefront; the 'o' in Block has been replaced with the glaring red eye of HAL9000 from 2001: A Space Odyssey. Mark Zuckerberg's metaverse avatar peeks out from behind a pillar.

Tax prep services send sensitive financial info to Facebook (permalink)

If you were unfortunate enough to e-file your US tax using HR Block, Taxact or Taxslayer, your most sensitive financial information was nonconsensually shared with Facebook, where it was added to the involuntary dossier the company maintains billions of people, including people who don't have Facebook accounts.

A blockbuster investigative report from The Markup and The Verge reveals that major tax-prep services illegally embedded the Facebook tracking pixel in their sites, configured so that it transmitted as much data as possible to the surveillance giant.

In their defense, the companies say that they didn't know that they were sending all this data to Facebook, and that they were using Facebook's surveillance pixel to "deliver a more personalized customer experience."

The companies had set the Facebook tracking pixel to use "automatic advanced matching," which scours any page it's embedded in for personally identifying information to harvest and transmit to Facebook.

Facebook claims that it doesn't want this data and won't use it, though the company has been previously caught violating fair finance laws by using finance data to discriminate against Black families:

But it's possible that Facebook isn't using this data – or that it doesn't know whether it's using this data. Facebook's own internal audits show that the company doesn't know what data it collects or how it uses it:

Remember, Facebook claims that it collects your data based on your consent; somehow it thinks that you can consent to collecting and using your data in ways that even Facebook can't describe.

As infuriating as Facebook's role in this data theft is, the real scandal is that Americans have to pay for tax preparation at all. In most of the world's wealthy countries, the tax authorities send taxpayers a precompleted tax-return every year. You can modify this return (on your own or with the help of a tax-prep professional), or you can just mail it back. For free.

This makes sense. The tax authorities already know how much you've made. They know what deductions you're entitled to. It is surreal that you have to pay a professional to fill in a form to tell the IRS a bunch of things it already knows about you.

Every attempt to bring free tax prep to America has been scuttled by an unholy alliance of anti-tax extremists like Grover Norquist (a sadist who wants to make paying your tax as cumbersome and painful as possible) and the multi-billion-dollar, highly concentrated tax-prep industry.

Companies like HR Block and Intuit have spent millions lobbying against free tax prep. It's money well spent, because tax prep makes billions for these companies. The biggest tax prep companies formed something called "the Free File Alliance" that purported to offer free tax-prep to low- and medium-income Americans.

In practice, "free filing" turned out to be a marketing funnel that tricked people into paying for services they were entitled to get for free. Intuit alone stole billions this way:

The monopolists who run America's tax-prep services claim that "government can't do anything well" and insist that the private sector will bring "efficiencies" to tax-prep. In reality, these companies literally have no idea what they're doing – they don't know what data they're collecting, nor who they're sharing it with.

Same goes for Facebook. Companies that are not disciplined by competition or regulation don't have to be good at their jobs. These companies' major competence is lobbying Congress to prevent the passage of meaningful privacy laws and laws that would save Americans billions through IRS-prepared tax-returns.

As Harvard tax-law prof told Propublica, this data Valdez is the "almost inevitable consequence of relying on for-profit companies to handle a government requirement. It’s a process that provides users little choice but to hand over their data to Facebook if they want to comply with the law."

(Image: Cryteria, CC BY 3.0; Social Woodlands, CC BY 2.0; modified)

Hey look at this (permalink)

This day in history (permalink)

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Colophon (permalink)

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