Filing for Free May Cost You


Free Tax Filing Websites Flunk Data Privacy Test

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Once again, tax season is upon us. For some, that means scheduling an appointment with an accountant; for others, it means renewing that subscription to tax prep software like TurboTax Premier Online (2011) or CompleteTax Premium Online (2011).

And for yet another bracket of us, it means looking for a website to file our taxes for free.

But as one privacy group discovered, filing for free will cost you a different kind of currency: your personal information. Identity Theft 911 looked at the 15 free tax filing companies provided by the IRS, and graded them based on how they approach policy and handle the data you submit.

Most, including brand-name services like Turbo Tax Freedom Edition and H&R Block Free File, track which websites you click into after you exit their sites for better ad targeting the next time you surf the Web. A lot of sites, including TurboTax, H&R Block, Tax Simple, and ez Tax Return, also sell or share your data with third parties other than the IRS and state-tax agency. Although they claim not to do this, a closer reading of their privacy policies show plenty of exceptions, such as affiliate businesses and government agencies. In H&R Block's case, this even includes "financial institutions with which we have joint marketing agreements."