Personal Data of Taxpayers Is Captured, Sold

Tuesday, August 18, 2026

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Personal Data of Taxpayers Is Captured, Sold—Complaint

Putative Class-Action Suit Filed in U.S. District Court for Central District of California Alleges That Software, Used By Tax-Return Preparers, Transmits Sensitive Information to Technology Giant Which Compiles Dossiers

By a MetNews Staff Writer

A putative nationwide class action filed in the U.S. District Court for the Central District of California alleges that when online tax-return preparation services are utilized, such as those of H&R Block, software of the defendant, The Trade Desk, Inc., a Ventura-based multi-billion technology company, will suck sensitive information relating to the user, utilizing it for its own purposes and peddling it to others.

“This is a class action arising from Defendant’s systematic interception, use, and disclosure of U.S. taxpayers’ most sensitive financial information—their Tax Return Information (“TRI”)—without taxpayers’ knowledge or consent,” the complaint, filed Friday, sets forth.

“Every year, tens of millions of Americans turn to online tax preparation platforms to prepare and file their federal and state income tax returns. When they do, they disclose the full financial picture of their lives—information the federal government has protected by criminal statute for over 50 years.” The complaint explains that to “exploit the commercial value of TRI, tax preparation companies”—which it says includes H&R Block, TaxSlayer, and Intuit’s TurboTax—“engage third-party vendors—including Defendant—to deploy tracking software on their websites and software applications.”

It notes that “interceptions of TRI were initiated from Defendant’s servers in California, the data was transmitted to Defendant’s computer systems in California for analysis, compilation, and identity matching, and the data was used in California.”

Advertising Space

The tax-return preparers, in return, are able to advertise their services on Trade Desk’s platform.

“The Trade Desk’s tracking is extensive, involving 300 million people with Unified IDs across 3.1 billion devices,” the complaint says, noting:

“The Trade Desk has received and continues to receive TRI from tens of millions of taxpayers.” Sixteen named plaintiffs, from 11 states, brought the action, with Sheila Johnson of Napa County, California as the lead plaintiff. She is alleged to have used online services of TurboTax in the years 2020 through 2025.

The plaintiffs are represented by two members of the State Bar of California, Aaron Zigler and Nidya Gutierrez of the Chicago-based Zigler Law Group, as well as by Kevin McCormack of their firm, who will seek to be admitted pro hac vice.

Secret Recordings, Transmissions

The pleading says:

“The Trade Desk tracking tools are used by Defendant to secretly record and transmit taxpayers’ activities, purchases, video and TV views, ad views, and other electronic communications, including TRI, to Defendant in real time.

“The TRI transferred includes taxpayer identifying information, including unique identifiers, spouse’s unique identifiers, tax filing year, tax forms used, filing status, whether the return was prepared online or in a retail location, prior year tax filing information, anticipated lifetime value to a tax preparer, and more. That data streams to Defendant’s servers at the moment of entry. When Defendant receives this information, it matches the information with identifiers from Defendant’s extensive database of personally identifiable information…to identify the individual taxpayer and add the intercepted TRI to the other data Defendant has collected to create a dossier on the taxpayer.”

Dossier Used, Sold

It continues:

“The dossier is used for Defendant’s own business purposes, including: for use in advertising to high lifetime value taxpayers, for excluding low lifetime value taxpayers or those who had already filed in the current tax year, for use in artificial intelligence or machine learning…algorithms, and in services provided for money to Defendant’s advertising clients.”

The complaint makes note that many nations permit tax returns to be filed directly with government agencies electronically, but that the Internal Revenue Service does not provides a means of doing so. Tax preparation services, it says, “use sophisticated technological means—including software that operates invisibly in the background of tax preparation apps and websites, and server-to-server transmissions invisible to users—to intercept, use, and disclose TRI for business purposes.”

23 Claims Pled

There are 23 claims set forth in 495 paragraphs. The complaint seeks class certification, declaratory and injunctive relief, restitution, statutory, actual and punitive damages, pre-judgment and post-judgment interest, and attorney fees and costs.

A claim is pled under the federal Electronic Communications Privacy Act and under state statutes and common law. Nine claims are brought “under California law arising from the interception, use, and disclosure of…TRI,” one “under California common law prohibiting an intrusion upon the seclusion of another.”

There is also a negligence claim brought by all plaintiffs “under California law on behalf of themselves and the nationwide class” or, alternatively, “each Plaintiff brings this claim on behalf of their respective state Class under their respective state’s law.”

The case is Johnson v. The Trade Desk, Inc., 2:26-cv-9101.