Google, H&R Block Sued for Sharing Taxpayers’ Financial Data

Alphabet Inc.’s Google and online tax preparation companies H&R Block Inc. and TaxAct Holdings Inc. are facing proposed class actions accusing them of violating taxpayers’ privacy by sharing their sensitive financial data, citing the findings of a recent congressional report.

Google and H&R Block were sued on Friday; TaxAct was sued Saturday, a Bloomberg Law analysis of court dockets found. Each lawsuit claimed that embedded pixels—strings of code that enable websites to track user interactions— transmitted information from millions of digital tax filings to tech companies.

The suits seeking damages come after the companies were named in a report released by Sen. Elizabeth Warren (D-Mass.) and other congressional Democrats that questioned whether tax preparation firms were improperly sharing consumers’ tax data via pixels with tech companies, which used the information to improve targeted advertising. Warren recommended that the Department of Justice, the Internal Revenue Service, and other agencies investigate possible criminal privacy violations.

Pixels are used by companies to identify how successful ad campaigns are by collecting data on where a website user clicks or what they type. But the litigants say those pixels also dredged up data including taxpayers’ gross incomes, tax refund amounts, net worth, and charitable contributions.

The lawsuit filed against Google in the US District Court for the Northern District of California alleged the tech company violated federal wiretapping protections and the state’s invasion of privacy law over its pixel’s transmission of the data.

H&R Block was accused of violating the federal Electronic Communications Privacy Act and state tax laws in a complaint filed in the Eastern District of New York.

TaxAct faces a lawsuit in the Northern District of Illinois alleging breach of implied contract, unjust enrichment, and violations of the state’s deceptive business practices law.

The congressional report also named TaxSlayer LLC, which has not been sued so far, and Meta Platforms Inc. In prior comments to Bloomberg Law, the companies named in the report reiterated commitments to protecting customer privacy.

Meta has been litigating a consolidated class action since December 2022, and TaxAct was already sued over taxpayer privacy concerns in February.

Pixel technology has also fueled hundreds of privacy lawsuits over the distribution of medical data and video-viewing information.