EDITORIAL: Another breach of confidential taxpayer information

A congressional report released this week reveals that several tax preparation firms shared the financial information of millions of Americans with tech companies. Consumers should take note — as should federal authorities. But the response from congressional Democrats was selective.

The probe derived from a November report in The Markup, an online tech watchdog, and was led by Sen. Elizabeth Warren, the Massachusetts Democrat. It concludes that the data for about 10 million people who filed their taxes through H&R Block, TaxSlayer and TaxAct was sent to Google and Facebook dating as far back as 2011.

According to the findings, much of the information was supposed to be anonymous, “but the legislators contend that a technology expert could easily get around the attempt at anonymizing the data,” The Washington Post reported. The tech companies used the information to target advertising.

“The tax prep firms were shockingly careless with their treatment of taxpayer data,” the lawmakers wrote in a letter to the IRS, the Federal Trade Commission and Attorney General Merrick Garland, according to the Post. An individual accountant who shared a client’s confidential tax numbers could face fines and criminal prosecution. “The lawmakers argued that the same law should apply to the software companies,” the Post reported.

While the tax preparation companies deserve a chance to defend themselves, they certainly merit harsh punishment if the allegations are true. But Democrats couldn’t let it go at that, insisting that the scandal highlights the merit of an IRS plan to compete in the private tax preparation business. It does anything but. The IRS proposal is simply an effort to expand its purview in search of more funding.

And on what basis is the IRS more trustworthy than TaxSlayer or H&R Block? Last September, the agency said it had mistakenly published on its website confidential tax information from 120,000 filers. In June 2021, the muckraking site ProPublica made a huge splash by revealing private financial details contained in the IRS returns filed by many wealthy taxpayers. An agency source who remains unidentified leaked the documents.

Yet there was nary a peep from most Democrats about the illegality or impropriety of IRS staffers purposely breaching confidentiality laws. Quite the contrary. Many progressives applauded the leak and showed little interest in tracking down the offender because it served their political purposes.

Yes, these tax preparation firms deserve to reap the consequences if they shirked their duty to treat the private information entrusted to them with the proper care. And so do IRS scofflaws who leak confidential data that the government forces taxpayers to provide under the assurance that it won’t be made available to a mass audience.