A class action settlement involving the popular online tax preparation service, TaxAct, is currently underway. This settlement concerns users of TaxAct’s online federal tax filing service from the past two to six years, with a total settlement amount of approximately $14.95 million. Eligible customers may be entitled to compensation.
Key Takeaways
- The settlement involves TaxAct users from January 1, 2018, to December 31, 2022.
- The estimated individual payout for eligible claimants is around $18.65.
- California residents and joint filers may qualify for slightly higher amounts.
- Claimants using TaxAct for their 2024 tax returns will receive complimentary expert assistance.
- The deadline for submitting claims is September 11, 2024.
- Objections to the settlement must be filed by August 12, 2024.
Background of the Lawsuit
The lawsuit alleges that TaxAct shared users’ personal and financial information with third-party entities, specifically Google and Meta (formerly Facebook), without obtaining proper consent. Tracking pixels were allegedly used to collect and transmit user data for advertising purposes, including names, email addresses, income data, and other sensitive information entered during the tax filing process. While TaxAct has agreed to settle, the company has not admitted any wrongdoing.
Eligibility and Compensation
The settlement applies to those who used TaxAct’s online do-it-yourself 1040 tax filing product between January 1, 2018, and December 31, 2022. To participate, you must meet the eligibility criteria and submit a claim form. Eligibility generally extends to those who used TaxAct’s online service and had a U.S. postal code during the covered period. Proof of purchase is not required.
- Estimated Payout: Approximately $18.65 per eligible claimant.
- Higher Payouts: California residents and joint filers may receive slightly higher amounts.
- Additional Benefits: Claimants planning to use TaxAct for their 2024 tax returns will receive complimentary expert assistance.
Important Dates
- Claim Submission Deadline: September 11, 2024
- Opt-Out Deadline: September 11, 2024
- Objection Deadline: August 12, 2024
Broader Implications
This settlement is part of a broader trend of privacy and fair advertising concerns in the tax preparation industry. Recently, the Federal Trade Commission (FTC) filed complaints against Intuit TurboTax and H&R Block, accusing these companies of misleading consumers with their advertising for digital tax filing products. While the individual payouts for the TaxAct settlement may be small, this situation serves as a reminder to remain vigilant about how companies use and share data provided for online financial services.
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