TaxAct Class Settlement

Frequently Asked Questions about the Smith-Washington, et al. v. TaxAct, Inc. Settlement 

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A federal court authorized the Notice because you have a right to know about the proposed Settlement of this Class Action lawsuit and about all of your options before the Court decides whether to grant Final Approval of the Settlement. The Notice explains the lawsuit, your legal rights, what benefits are available, and who can receive them.  

For information on how to determine if you are a Settlement Class Member, and therefore eligible for benefits under this settlement, see Questions 4 and 5.

This lawsuit was brought on behalf of TaxAct users who allege that TaxAct purportedly shared or otherwise made accessible to third parties (including but not limited to Facebook (now Meta Platforms, Inc.) and Google) certain of its users’ personal and financial information, without permission. TaxAct expressly denies any liability or wrongdoing. The Honorable Vince Chhabria of the United States District Court for the Northern District of California was appointed to oversee this lawsuit. The people that filed this lawsuit are called the “Plaintiffs” and the company they sued, TaxAct, is called the “Defendant.” 

In a Class Action, one or more individuals sue on behalf of other people with similar claims. These individuals are known as “Settlement Class Representatives.” Together, the people included in the Class Action are called a “Settlement Class” or “Settlement Class Members.” One Court resolves the lawsuit for all Settlement Class Members, except for those who opt-out from a settlement. In this Settlement, the Settlement Class Representatives are Plaintiffs Nicholas C. Smith-Washington, Joyce Mahoney, Jonathan Ames, Matthew Hartz, and Jenny Lewis.

The Court did not decide in favor of Plaintiffs or Defendant. Defendant denies all claims that it violated any law. Plaintiffs and Defendant agreed to a Settlement to avoid the costs and risks of further litigation and to allow the Settlement Class Members to receive cash payments and relief in the form of complementary use of TaxAct® Xpert Assist. The Settlement Class Representatives and their attorneys think the Settlement is best for all Settlement Class Members. 

There are two Settlement Classes. If you fall within one of these definitions and have not filed a demand for arbitration, you are in the Settlement Class.

  1. The Nationwide Class includes all natural persons who used a TaxAct online do-it-yourself consumer Form 1040 tax filing product and filed a tax return using the TaxAct online product at any time between January 1, 2018, and December 31, 2022, and whose postal address listed on their tax return was in the United States. The Nationwide Class includes a California Subclass of members whose postal address listed on their tax returns was in California.  

  1. The Nationwide Married Filing Jointly Class includes all natural persons whose spouse used a TaxAct online do-it-yourself consumer Form 1040 tax filing product and filed a joint tax return using the TaxAct online product at any time between January 1, 2018, and December 31, 2022, and whose postal address listed on such joint tax return was in the United States. The Nationwide Married Filing Jointly Class also includes a California Married Filing Jointly Subclass of members whose postal address listed on the joint tax return was in California.

However, if, as of January 9, 2024, you filed a demand for arbitration against TaxAct to arbitrate claims that would otherwise be released in accordance with the terms of the Settlement Agreement, you are excluded from both Settlement Classes unless you elect to opt-in to the Settlement Classes by filing a timely Claim Form.

Yes. The Settlement does not include: (i) TaxAct, its current, former and/or future parents, subsidiaries, divisions, affiliates and/or departments, and their employees, officers, directors, management, legal representatives, heirs, successors, and wholly or partly owned subsidiaries or affiliated companies during the period from January 1, 2018, through to and including December 31, 2022; (ii) counsel for Plaintiffs and their employees, including but not limited to the undersigned counsel for Plaintiffs and the undersigned counsel’s employees; (iii) any district judge or magistrate judge to whom this case is or was assigned, as well as those judges’ immediate family members, judicial officers and their personnel, and all governmental entities; (iv) customers who only used TaxAct’s download do-it-yourself consumer Form 1040 tax return filing product, TaxAct’s Professional products, or TaxAct’s online do-it-yourself business tax return filing products; (v) and all individuals who have, as of January 9, 2024, filed a demand for arbitration against TaxAct to arbitrate claims that would otherwise be released in accordance with the terms of the Settlement unless those individual elect to opt-in to the Settlement Classes by filing a timely Claim Form.

If you are not sure whether you are included in the Settlement Class, you can ask for free help by emailing the Settlement Administrator at [email protected] or calling the Settlement Administrator at (833) 425-9910. You may also view the Settlement Agreement here.

If the Settlement is approved by the Court, TaxAct will establish a Settlement Fund of fourteen million, nine hundred and fifty thousand U.S. dollars ($14,950,000.00) plus up to two million five hundred thousand U.S. dollars ($2,500,000) of additional funds set aside to be used towards Notice and Administration Costs with any remainder of unused Notice and Administration Costs funds to be distributed to the Settlement Class. The Settlement Fund will be used to pay all valid claims submitted by Settlement Class Members (approximately $18.65 each), as well as Notice and Administration Expenses, Attorneys’ Fees and Costs (up to 25% of the cash value of the Settlement Fund plus up to 25% of the value of Xpert Assist redeemed by approved Settlement Class Members, up to a maximum redeemed value of Five Million Eight Hundred Thousand US Dollars and Zero Cents ($5,800,000.00), as well as reasonable expenses), and Service Awards (up to $10,000 each) for the Settlement Class Representatives. TaxAct will also provide Xpert Assist to all Settlement Class Members who submit a valid Claim Form and who return to prepare a 2024 tax return on TaxAct’s website using any TaxAct online do-it-yourself consumer Form 1040 tax return filing product (including TaxAct’s free product).

The answer depends on how many Settlement Class Members submit valid claims. It also depends on which Settlement Class and Subclass you are a member of.

First, the total amount distributed will be the Qualified Settlement Fund minus any amount awarded by the Court as fees and costs to Class Counsel, any Service Awards to the Settlement Class Representatives, and Notice and Administration Costs, and such other costs, expenses, or amounts as may be awarded or allowed by the Court. The resulting amount is called the “Net Settlement Fund.” The Net Settlement Fund is the amount of money available to be distributed to Settlement Class Members. 

Next, the Net Settlement Fund will be allocated to Settlement Class Members who submit valid claims, also called “Authorized Claimants.” If an Authorized Claimant was a member of one Class or a Subclass during a portion of the Class Period and was a member of a different Class or Subclass during a different portion of the Class Period, the Authorized Claimant will be assigned allocation points for the Class or Subclass to which the Authorized Claimant belonged that has the highest number of allocation points. Allocation points shall be assigned as follows: Where you used a TaxAct online do-it-yourself consumer Form 1040 tax filing product and filed a tax return using the TaxAct online product, and the postal address listed on your tax return was in California (i.e., you are a California Subclass Member) you will be assigned 6 points. Where you used a TaxAct online do-it-yourself consumer Form 1040 tax filing product and filed a tax return using the TaxAct online product, and the postal address listed on your tax return was elsewhere in the United States (i.e., you are a Nationwide Class Member and not a California Subclass Member), you will be assigned 3 points. Where your spouse used a TaxAct online do-it-yourself consumer Form 1040 tax filing product and filed a joint tax return using the TaxAct online product, and the postal address listed on the joint tax return was in California (i.e., you are a California Married Filing Jointly Subclass Member), you will be assigned 2 points. Finally, where your spouse used a TaxAct online do-it-yourself consumer Form 1040 tax filing product and filed a joint tax return using the TaxAct online product, and the postal address listed on the joint tax return was elsewhere in the United States (i.e., you are a Nationwide Married Filing Jointly Class Member and not a California Married Filing Jointly Subclass Member), you will be assigned 1 point.

After the deadline for submitting a claim (see Question 11 below), the Settlement Administrator will add up all the points assigned to all the Authorized Claimants and divide the Net Settlement Amount by that number. The result will be the amount of the Net Settlement Fund available for each point. Each Authorized Claimant will receive that per-point amount multiplied by the number of points they were assigned.

In addition to the cash payment, all Authorized Claimants who return to prepare their tax year 2024 return using any TaxAct online do-it-yourself consumer Form 1040 tax return filing product (including TaxAct’s free product) will be provided with complimentary Xpert Assist. Specifically, upon entering their Social Security number into the TaxAct platform, which occurs at the beginning of the tax return form process, Authorized Claimants will receive a pop-up alerting them to their complimentary Xpert Assist and be able to add and use Xpert Assist immediately. Xpert Assist provides one-on-one advice over the phone from real tax experts and allows for personalized tax advice.

Settlement funds that are allocated to the Settlement Classes but are unclaimed by Settlement Class Members who submit valid claims (also called “Authorized Claimants”) will be redistributed to the Authorized Claimants on a pro rata basis if it is practicable to do so. Settlement funds may be unclaimed, for example, due to returned checks. If there are unclaimed settlement funds that are impracticable to redistribute to Authorized Claimants, then the parties will present a proposal to the Court for treatment of those residual funds. That proposal would only become effective upon the Court’s approval.

Unless you opt-out of the Settlement, you cannot sue, continue to sue, or be part of any other lawsuit or arbitration against the Defendant about any of the legal claims this Settlement resolves. The “Released Claims” section in the Settlement Agreement describes the legal claims that you give up (“release”) if you remain in the Settlement Class.  Released Claims include claims that are pled or could have been pled based on, relating to, or arising out of the identical factual predicate in the Operative Complaint. The Settlement Agreement and Operative Complaint can be found here.

Claim Forms may be submitted online or printed and mailed to the Settlement Administrator at: Smith-Washington v. TaxAct, Inc., c/o Kroll Settlement Administration LLC, PO Box 225391, New York, NY 10150-5391. You may also contact the Settlement Administrator to request a Claim Form by telephone (833) 425-9910, by email at [email protected], or by U.S. mail at Smith-Washington v. TaxAct, Inc., c/o Kroll Settlement Administration LLC, PO Box 225391, New York, NY 10150-5391. 

If you submit a claim by U.S. mail, the completed and signed Claim Form must be postmarked by September 11, 2024. If submitting a Claim Form online, you must do so by 11:59 p.m. PT on September 11, 2024.  

The Court has scheduled a Final Approval Hearing for the Settlement of this case on November 21, 2024 at 2:00 p.m. PT to consider: (1) whether to approve the Settlement; (2) any objections; (3) the requests for awards to the Settlement Class Representatives; and (4) the request for an Attorneys’ Fees and Expenses Award to Settlement Class Counsel for their work in this litigation. If the Court approves the Settlement, there may be appeals. It is always uncertain whether appeals will be filed and, if so, how long it will take to resolve them. Settlement payments will be distributed as soon as possible if the Court grants Final Approval of the Settlement and after any appeals are resolved. After January 1, 2025, Xpert Assist will be provided to Authorized Claimants upon entering their Social Security number into the TaxAct platform, which occurs at the beginning of the tax return form process, Authorized Claimants will receive a pop-up alerting them to their complimentary Xpert Assist and be able to add and use Xpert Assist immediately for preparation of their tax year 2024 return. The briefs and declarations in support of the Final Approval of the Settlement and the requests described above will be posted here after they are filed. You may ask to appear at the hearing, but you do not have to appear. The date and time of the Final Approval Hearing is also subject to modification by the Court. Please review this website for any updated information regarding the final hearing.

Yes. The Court has appointed Julian Hammond and Christina Tusan of HammondLaw, P.C. and Warren D. Postman of Keller Postman LLC to represent the Settlement Class as Class Counsel:

Julian Hammond
Christina Tusan
HammondLaw, P.C.
1201 Pacific Ave., 6th Floor
Tacoma, WA 98402
(323) 805-0335
www.hammondlawpc.com

Warren D. Postman
Keller Postman LLC
1100 Vermont Avenue, N.W., 12th Floor
Washington, DC 20005

You will not be charged for their services.

You do not need to hire your own lawyer because Class Counsel works for you. If you want to be represented by your own lawyer, you may hire one at your own expense. 

Class Counsel will ask the Court for an award of attorneys’ fees not to exceed 25% of the Qualified Settlement Fund plus up to 25% of the value of the Xpert Assist redeemed by Authorized Claimants, up to a maximum redeemed value of Five Million Eight Hundred Thousand US Dollars and Zero Cents ($5,800,000.00), as well as reasonable expenses incurred in the litigation. They will also ask the Court to approve a Service Award for each of the Settlement Class Representatives not to exceed $10,000 each. The Court may award less than these amounts. If approved, these fees, costs, and awards will be paid from the Qualified Settlement Fund. The portion of the attorneys’ fees that will be paid based on the value of the redemption of Xpert Assist will not be paid before May 2025, which allows time for a reasonable valuation of the redeemed value of Xpert Assist.

In addition to 25% of the Qualified Settlement Fund, Class Counsel may receive up to $1.45 million in attorneys’ fees and expenses based on how many Authorized Claimants redeem their Xpert Assist. Specifically, Class Counsel may receive 25% of the redeemed value of Xpert Assist up to a maximum redeemed value of $5.8 million. The Settlement Administrator will hold back $1.45 million of the settlement fund for these attorneys’ fees until the final amount of attorneys’ fees can be determined. If Class Counsel are not entitled to the full amount of $1.45 million, then the remaining funds of the $1.45 million will be distributed to the National Consumer Law Center, a nonprofit organization specializing in consumer legal issues.

If you do not want to receive any benefits from the Settlement, and you want to keep your right, if any, to separately sue the Defendant about the legal issues in this case, you must take steps to exclude yourself from the Settlement Class. This is called “opting-out” of the Settlement Class. The deadline for requesting exclusion from the Settlement is September 11, 2024. 

To exclude yourself from the Settlement, you must submit a complete opt-out form here or by U.S. mail at the below address. Alternatively, you may submit a written opt-out request that includes the following information: (i) the case name of the Action, Smith-Washington, et al. v. TaxAct, Inc., Case No. 3:23-cv-00830 (N.D. Cal.); (ii) your first and last name and current address; (iii) first and last name, email address, phone number, and mailing address associated your TaxAct account or of your spouse’s TaxAct account if you are a member of the Married Filing Jointly Class; (iv) your personal signature; and (v) a statement clearly indicating your intent to be excluded from the Settlement. The request for exclusion must be made only for the individual whose personal signature appears on the request.

If you exclude yourself, you are stating to the Court that you do not want to be part of the Settlement. You will not be eligible to receive a payment or the complementary use of Xpert Assist from this Settlement if you exclude yourself. You may only exclude yourself – not any other person. Opt-out requests seeking exclusion on behalf of more than one individual will be found invalid by the Settlement Administrator. 

If submitted electronically, the opt-out form or any written request to opt-out must be submitted and verified no later than 11:59 p.m. PT on September 11, 2024. 

If submitted by U.S. mail, at the below address, the opt-out form or any written request to opt-out must be postmarked no later than September 11, 2024.

Smith-Washington v. TaxAct, Inc.
Attn: Opt-Out Request, Kroll Settlement Administration LLC
PO Box 225391
New York, NY 10150-5391

If you are a Settlement Class Member, you can choose to object to the Settlement if you do not like it or a portion of it. You can ask the Court to deny approval by filing an objection. You can give reasons why you think the Court should not approve it. The Court will consider your views. You can’t ask the Court to order a different settlement; the Court can only approve or reject the Settlement. If the Court denies approval, no settlement payments will be sent out, complementary Xpert Assist will not be provided to Authorized Claimants, and the lawsuit will continue. If that is what you want to happen, you should object. Any comments or objections from Settlement Class Members regarding the proposed Settlement Agreement must be submitted in writing to the Court either by mailing them to the Class Action Clerk, United States District Court for the Northern District of California; or by filing them in person at any location of the United States District Court for the Northern District of California, and they must be filed or postmarked on or before August 12, 2024.

Class Action Clerk
United States District Court for the Northern District of California
450 Golden Gate Avenue, Box 36060
San Francisco, CA 94102-3489

Your objection must include: (i) the case name and number: Smith-Washington, et al. v. TaxAct, Inc., Case No. 3:23-cv-00830 (N.D. Cal.); (ii) your full name, address, telephone number, and email address; (iii) the email address associated with the objector’s TaxAct account, or the email address associated with their Spouse’s TaxAct account if the objector is a Married Filing Jointly Class Member; (iv) a statement of whether your objection applies only to you, to a specific subset of a class or subclass, to an entire class or subclass, or to all members of both Settlement Classes; (v) a statement of the number of times in which you (and, where applicable, your counsel) have objected to a class action settlement, along with the caption of each case in which you (or your counsel) made such objection; (vi) a statement of whether the objector has sold or otherwise transferred the right to their recovery in this Action to another person or entity, and, if so, the identity of that person or entity; (vii) a statement of the specific grounds for the objection, including any legal or factual support and any evidence in support of the objection; (viii) a statement of whether you intend to appear at the Final Approval Hearing, and if so, whether personally or through counsel; and (ix) your signature. These requirements may be excused by the Court upon a showing of good cause. You or your attorney may speak at the Final Approval Hearing about your objection. To do so, you must include a statement in your objection indicating whether you or your attorney intend to appear at the Final Approval Hearing. This requirement may be excused upon a showing of good cause. You may also appear at the Final Approval Hearing without submitting a written objection upon a showing of good cause.

Objecting is telling the Court that you do not like something about the Settlement. You can object to the Settlement only if you do not exclude yourself from the Settlement. Excluding yourself from the Settlement is opting-out and stating to the Court that you do not want to be part of the Settlement. If you opt-out of the Settlement, you cannot object to it because the Settlement no longer affects you.

The Court has scheduled a Final Approval Hearing at 2:00 p.m. PT on November 21, 2024. If the hearing proceeds in person, it will be held at the San Francisco Courthouse, Courtroom 4 – 17th Floor, 450 Golden Gate Avenue, San Francisco, CA 94102. If the Court holds the hearing by video conference, you will find a link to the video conference at the following address: https://www.cand.uscourts.gov/judges/chhabria-vince-vc/.

At the Final Approval Hearing, the Court will consider whether the Settlement is fair, reasonable, and adequate. The Court will also consider whether to approve Class Counsel’s request for an Attorneys’ Fees and Expenses Award, as well as the Settlement Class Representatives’ Service Awards. If there are objections, the Court will consider them. Judge Chhabria will listen to people who have asked to speak at the hearing (see Question 18 above). After the hearing, the Court will decide whether to approve the Settlement.  

The date or time of the Final Approval Hearing may change. Please check this website for any updates, and to find out whether the Final Approval Hearing will be held in person or by video conference.

No. Class Counsel will answer any questions the Court may have. You may attend at your own expense if you wish. If you file an objection, you do not have to come to the Final Approval Hearing to talk about it. If you file your written objection on time, the Court will consider it. You may also pay your own lawyer to attend, but such attendance is not necessary for the Court to consider your objection if it was filed on time.

If you are a Settlement Class Member and you do nothing, you will give up the rights explained in Question 9, including your right to start a lawsuit, continue a lawsuit, or be part of any other lawsuit or arbitration against the Defendant and the Released Parties about the legal issues or factual allegations resolved by this Settlement. In addition, you will not receive a payment or get access to complementary Xpert Assist from this Settlement.

The Notice summarizes the proposed Settlement. Complete details are provided in the Settlement Agreement. The Settlement Agreement and other related documents are available here.

If you have additional questions, you may contact the Settlement Administrator by email, phone, or mail:  


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 

Publicly filed documents can also be obtained by: 
  • accessing the Court docket in this case, for a fee, through the Court’s Public Access to Court Electronic Records (PACER) system at https://ecf.cand.uscourts.gov;
  • visiting the office of the Clerk of the United States District Court for the Northern District of California at: Office of the Clerk, United States District Court, 450 Golden Gate Avenue, San Francisco, CA 94102-3489 between 9:00 a.m. and 4:00 p.m., Monday through Friday, excluding Court holidays.  
Please do not telephone the Court, the Clerk’s Office, or TaxAct to inquire about the Settlement or the claims process.

The deadline to submit a Claim Form has passed. However, you may still submit a claim. The Claim Form may be downloaded and printed from the documents page. Please mail your Claim Form to: Smith-Washington v. TaxAct, Inc. c/o Kroll Settlement Administration LLC PO Box 225391 New York NY 10150-5391. Please note: We cannot guarantee approval of your claim.

This website is authorized by the Court, supervised by counsel and controlled by Kroll Settlement Administration LLC, the Settlement Administrator approved by the Court. This is the only authorized website for this case.
Call
(833) 425-9910
Email
[email protected]
Mail
Smith-Washington v. TaxAct Inc.
c/o Kroll Settlement Administration LLC
PO Box 225391
New York, NY 10150-5391

Documents

Please read for a full explanation of the settlement and your options and all applicable timelines.

Contact

Contact us with any inquiries, comments, and/or requests.

Submit Claim

Click here to safely and securely submit a Claim Form.

Opt-Out Form

Click here to safely and securely submit a Opt-Out Form.

Important Dates

  • Opt-Out Deadline

    Wednesday, September 11, 2024 You must complete and mail your Request to Opt-Out form so that it is postmarked no later than September 11, 2024.

  • Objection Deadline

    Monday, August 12, 2024 You must mail your objection(s) and/or notice of intent to appear at the Final Approval Hearing so that it/they are postmarked no later than August 12, 2024.

  • Claims Submission Deadline

    Wednesday, September 11, 2024 You must submit your Claim Form online no later than September 11, 2024 or mail your completed paper Claim Form so that it is postmarked no later than September 11, 2024.

  • Final Approval Hearing

    Thursday, November 21, 2024 The Final Approval Hearing is scheduled for November 21, 2024 at 2:00 p.m. PT. Please check this website for updates.

Important Documents

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