Missouri AG accuses tax preparation firms of illegally sharing data with big tech firms

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Missouri Attorney General Andrew Bailey speaks to reporters after taking the oath of office in Jefferson City on Jan. 3, 2023.  

JEFFERSON CITY — Missouri Attorney General Andrew Bailey on Thursday filed a lawsuit against Kansas City giant H&R Block and two other tax preparation companies, accusing them of illegally sharing Missourians’ data with large technology firms.

The lawsuit, filed in St. Louis Circuit Court, alleged that H&R Block, Taxslayer and TaxAct violated the state’s consumer protection law by sharing sensitive information with Meta, which owns Facebook, Google and “perhaps other tech companies.”

“The last thing we need is for Big Tech giants to have access to personal information because these tax companies decided to evade the law,” Bailey said in a statement Thursday. “My office isn’t standing for it.”

Bailey asked a judge to issue a permanent injunction against the tax preparation companies, barring them from collecting sensitive data without disclosures. The lawsuit seeks full restitution for Missourians who allegedly had their data used. And it asks for a civil fine and a payment to the state equal to 10% of the amount recouped from restitution.

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H&R Block, founded in 1955, is headquartered in downtown Kansas City and is one of the country’s leading tax preparation companies. The firm offers consulting services as well as online tax filing on their website.

TaxSlayer is based in Georgia, while TaxAct is in Iowa. The three companies did not immediately respond to requests for comment on Thursday.

Bailey’s lawsuit alleges that the tax preparation firms used a computer code, called pixels, to send sensitive information, including tax return information, to technology companies “despite explicitly promising not to share such information with third parties in their privacy policies.”

The companies, according to the lawsuit, gave Meta access to information such as names and financial information such as savings account contributions.

It accuses the companies of violating the state’s Merchandising Practices Act, the state’s consumer protection law, in four different ways: misrepresentation, omission, deception and unfair business practices.

Bailey employed the same law earlier this year when he tried to effectively ban gender-affirming care for adults as well as kids. Bailey ultimately withdrew that rule after lawmakers passed a ban on care for minors.

The lawsuit filed Thursday builds upon litigation that Bailey’s predecessor Eric Schmitt filed last year alleging that the White House violated the First Amendment by colluding with social media companies to suppress conservative speech about COVID-19 regulations and false claims about the 2020 presidential election.

A federal judge issued an injunction in Missouri’s favor earlier this month.

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