A multimillion-dollar settlement involving TaxAct, a widely used online tax preparation service, is currently in progress due to alleged data privacy violations. The settlement impacts customers who utilized TaxAct’s services for filing their federal taxes between January 1, 2018, and December 31, 2022.

Background of the TaxAct Lawsuit

The lawsuit against TaxAct alleges that the company shared users’ personal and financial information with third-party entities, including Google and Meta (formerly Facebook), without obtaining proper consent. The use of tracking pixels purportedly enabled the collection and transmission of sensitive data, such as names, email addresses, and income information, during the tax filing process.

Although TaxAct has agreed to the settlement, the company has not admitted any wrongdoing. The total settlement amount is approximately $14.95 million, and eligible customers may receive compensation as part of this resolution.

Who is Eligible for the Settlement?

To qualify for the settlement, customers must have used TaxAct’s online do-it-yourself 1040 tax filing product during the specified period. The estimated individual payout for eligible claimants is around $18.65. California residents and joint filers may be eligible for slightly higher amounts. Additionally, claimants who plan to use TaxAct for their 2024 tax returns will receive complimentary expert assistance as part of the settlement.

How to File a Claim

Eligible customers need to submit a claim form to participate in the settlement. Claims can be submitted online through the official settlement website, and proof of purchase is not required. The eligibility criteria include having used TaxAct’s online service and having a U.S. postal code during the covered period.

Important Dates

• Deadline for submitting claims: September 11, 2024
• Deadline for opting out of the settlement: September 11, 2024
• Deadline for filing objections: August 12, 2024

Contact Information for the Settlement Administrator

For questions regarding the settlement, customers can contact the Settlement Administrator, Kroll Settlement Administration, via the following:

• Email: [email protected]
• Toll-Free: (833) 425-9910
• Mail:
  Smith-Washington v. TaxAct, Inc.
  c/o Kroll Settlement Administration LLC
  PO Box 225391
  New York, NY 10150-5391

Broader Context and Implications

This settlement reflects broader concerns about privacy and fair advertising practices within the tax preparation industry. The Federal Trade Commission (FTC) has also filed complaints against other major tax service providers like Intuit TurboTax and H&R Block, accusing them of misleading consumers with their digital tax filing product advertisements.

While individual payouts in the TaxAct settlement may be modest, this case underscores the importance of vigilance regarding how companies use and share personal data in online financial services.