April 20th David Lazarus, a San Francisco Chronicle columnist, wrote that TurboTax and H&R Block online tax filing systems may violated California law. Both companies use webbugs and cookies to provide third-party marketers with information gathered while customers prepared and filed their tax returns. Enter Section 17530.5 of the California Business and Professions Code:

17530.5. (a) It is a misdemeanor for any person, including an individual, firm, corporation, association, partnership, or joint venture, or any employee or agent thereof, to disclose any information obtained in the business of preparing federal or state income tax returns or assisting taxpayers in preparing those returns, including any instance in which this information is obtained through an electronic medium: [source]

Let’s hear it for software localization!

While the Code does not include specific penalties for a violation misdemeanors are generally punishable by imprisonment for up to one year and/or a fine up to $1,000.00. Apparently a class action civil suit by victims of these violations is possible.