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 info@TaxActClassSettlement.com 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 (See Question 17), 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.

The deadline to submit a claim has passed. You can no longer submit a Claim Form.

The deadline for submitting a claim was September 11, 2024. You can no longer submit a Claim Form.

The Court held a Final Approval Hearing for the Settlement of this case on December 5, 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. The Court approved the Settlement on December 30, 2024 and appeal was filed by objectors to the Settlement on January 2, 2025. It is always uncertain how long it will take to resolve appeals. Settlement payments will be distributed as soon as possible after any appeals are resolved and the Settlement remains approved. Pursuant to the Final Approval of the Settlement granted by the Court, Xpert Assist is available to Authorized Claimants beginning January 7, 2025 for their 2024 tax year return, while the appeal is pending. Authorized Claimants will receive a pop-up alerting them to their complimentary Xpert Assist upon entering their Social Security number into the TaxAct platform, which occurs at the beginning of the tax return form process, and are able to add and use Xpert Assist immediately for preparation of their tax year 2024 return.

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. 

The Court awarded attorneys’ fees equal to 22.2% of the Qualified Settlement Fund plus up to 10% 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. The Court also approved a Service Award for each of the Settlement Class Representatives of $5,000 each. Pending appeals, the Court may ultimately 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 22.2% of the Qualified Settlement Fund, Class Counsel may receive up to $580,000 in attorneys’ fees and expenses based on how many Authorized Claimants redeem their Xpert Assist. Specifically, Class Counsel may receive 10% of the redeemed value of Xpert Assist up to a maximum redeemed value of $5.8 million. The Settlement Administrator will hold back $580,000 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 $580,000, then the remaining funds of the $580,000 will be distributed to the National Consumer Law Center, a nonprofit organization specializing in consumer legal issues.

The deadline for requesting exclusion from the Settlement was September 11, 2024. You can no longer opt-out of the Settlement.

The deadline for filing an objection to the Settlement was August 12, 2024. You can no longer file an objection to the Settlement.

Objecting was telling the Court that you did not like something about the Settlement. Excluding yourself from the Settlement was opting-out and stating to the Court that you did not want to be part of the Settlement.

The Court held a Final Approval Hearing at 2:00 p.m. PT on December 5, 2024 by video conference.

At the Final Approval Hearing, the Court considered whether the Settlement was fair, reasonable, and adequate. The Court also considered whether to approve Class Counsel’s request for Attorneys’ Fees and an Expenses Award, as well as the Settlement Class Representatives’ Service Awards. The Court also considered objections to the Settlement.

No. Class Counsel appeared on your behalf and answered any questions the Court had.

Pending resolution of any appeals, if you are a Settlement Class Member and you did nothing, you gave 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:  

Email: info@TaxActClassSettlement.com

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. You can no longer submit a Claim Form.

Yes. Xpert Assist Unlimited Access is the same service as last year’s Xpert Assist service – only the name is different.

Authorized Claimants are eligible to use Xpert Assist Unlimited Access to prepare their first do-it-yourself consumer form 1040 tax filing return using their Social Security number created under their TaxAct account. Subsequent returns will not have access to free Xpert Assist Unlimited Access, but it will be available as an add-on for purchase for additional returns.

Under the Settlement, Xpert Assist Unlimited Access is available to Authorized Claimants for TaxAct online do-it-yourself consumer form 1040 tax filing products only.

Xpert Assist Unlimited Access is available to Authorized Claimants. It is provided to Authorized Claimants when an Authorized Claimant creates a new return in their account and enters their Social Security number. Authorized Claimants receive a pop-up alerting them to their complimentary Xpert Assist Unlimited Access and are able to add and use Xpert Assist Unlimited Access immediately for preparation of their tax year 2024 return.

TaxAct offers different tiers of Xpert Assist to provide different types of support for customers filling out a tax return. Authorized Claimants receive access to Xpert Assist Unlimited Access free of charge upon entering their Social Security number into their account on the TaxAct platform, which occurs at the beginning of the tax return creation process.

Under the Settlement, Xpert Assist Unlimited Access is available to Authorized Claimants using TaxAct’s online do-it-yourself consumer form 1040 tax filing products. The TaxAct IRS Free File Program product is separate from the TaxAct online do-it-yourself consumer form 1040 tax filing products, and Xpert Assist Unlimited Access is not available in the TaxAct IRS Free File Program product.

Yes, if you inadvertently added Xpert Assist Xpress Connect to your account, you will receive it for free and can also upgrade to Xpert Assist Unlimited Access at no additional charge on your first return.

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
info@TaxActClassSettlement.com
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, December 5, 2024 The Final Approval Hearing is scheduled for December 5, 2024 at 2:00 p.m. PT. Please check this website for updates.

Important Documents

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