The TaxAct lawsuit settlement is a $14.95 million class action deal resolving claims that the online tax preparer shared users’ financial information with Meta and Google through tracking code on its website. A federal judge gave the settlement final approval on December 30, 2024, but a notice of appeal filed on January 2, 2025 has frozen all payments to class members while the Ninth Circuit Court of Appeals reviews the case.1Claim Depot. TaxAct $14,950,000 Settlement for Unauthorized Data Sharing Claims
What TaxAct Was Accused of Doing
The case began after a 2022 investigation by the nonprofit newsroom The Markup found that TaxAct had installed the Meta Pixel, a snippet of tracking code, on its website. The pixel captured information users entered while preparing their returns and sent it to Meta. In TaxAct’s case, transmitted data included filing status, adjusted gross income, refund amounts, and the names of dependents, along with names, email addresses, and phone numbers pulled through a feature called “automatic advanced matching.”2The Markup. Tax Filing Websites Have Been Sending Users’ Financial Information to Facebook
Five named plaintiffs sued in Alameda County Superior Court on January 24, 2023. TaxAct removed the case to the U.S. District Court for the Northern District of California, where it was assigned to Judge Vince Chhabria.3CourtListener. Smith-Washington v. TaxAct, Inc. The complaint alleged that TaxAct’s use of third-party tracking technologies violated users’ privacy by sharing personal and financial data without authorization.
TaxAct denied wrongdoing. The settlement agreement states that the company “expressly denies any liability” and “denies that it violated any law,” and says TaxAct agreed to settle only to avoid the costs and risks of continued litigation.4TaxAct Class Settlement. Notice of Proposed Class Action Settlement When The Markup’s findings were first reported, TaxAct said publicly that it had “always complied with laws that protect our customers’ privacy” and had disabled the tracking tools.5The Hill. Tax Preparers Shared Personal Data With Meta, Google: Senate Report
What the Settlement Provides
The settlement creates a $14,950,000 cash fund, plus up to $2.5 million more for notice and administration costs.4TaxAct Class Settlement. Notice of Proposed Class Action Settlement After attorneys’ fees, expenses, and service awards come out, the remainder — the Net Settlement Fund — is divided among class members who filed valid claims. The settlement notice estimated individual payouts at roughly $18.65, though the actual amount depends on the number of valid claims.
Payments use a point system that gives more weight to California residents (who had additional state-law claims) and to direct filers over spouses on joint returns:
- California class members: 6 points per claim
- Non-California class members: 3 points per claim
- California married-filing-jointly members: 2 points per claim
- Non-California married-filing-jointly members: 1 point per claim
The per-point dollar figure is calculated by dividing the Net Settlement Fund by the total points across all valid claims.
The deal also includes in-kind relief valued at up to $5.8 million: class members who returned to file their 2024 tax return through TaxAct’s online consumer product received complimentary access to Xpert Assist, a service offering one-on-one phone advice from tax professionals.
Who Qualified — And the Claim Deadline That Has Passed
The settlement covered anyone who used a TaxAct online do-it-yourself consumer Form 1040 filing product to file a return with a U.S. postal address between January 1, 2018 and December 31, 2022. A separate class covered spouses whose partner filed a joint return using TaxAct during that same period, and both classes had California-specific subclasses.4TaxAct Class Settlement. Notice of Proposed Class Action Settlement
Users of TaxAct’s downloadable desktop product, its professional preparer tools, and its online business tax products were not included. Neither were people who had already filed arbitration demands against TaxAct as of January 9, 2024, unless they opted into the settlement by submitting a claim form.
The deadline to file a claim or opt out was September 11, 2024, and it has passed.6Top Class Actions. TaxAct Privacy Violations $14.95M Class Action Settlement Late claims are not being accepted.
Why Payments Are on Hold
Just days after Judge Chhabria approved the settlement, a notice of appeal was filed on January 2, 2025. The Ninth Circuit docketed the case as number 25-128. The appellants are Matthew Sessom and James Kirkham, class member objectors represented by attorney Eric Pasternack.7Justia. Sessom et al. v. Smith-Washington et al., No. 25-128 The appellate schedule set the opening brief for late March 2025 and the answering brief for late April 2025.
Until the Ninth Circuit resolves the appeal, no settlement checks will be issued. The class notice warned in advance that “there may be appeals” after final approval and that “it is always uncertain whether appeals will be filed and, if so, how long it will take to resolve them.”4TaxAct Class Settlement. Notice of Proposed Class Action Settlement Distributions begin only after the appeal is resolved. As of early 2026, the case remains pending.
How to Check the Status of Your Claim
If you submitted a claim before the September 2024 deadline, updates are posted at the official settlement website, www.TaxActClassSettlement.com. You can also reach Kroll Settlement Administration, the claims administrator, by phone at (833) 425-9910 or by email at info@TaxActClassSettlement.com.8TaxAct Class Settlement. Short Form Settlement Notice Keep any address or contact information current with the administrator so that a check can reach you when distributions eventually begin.
The Attorneys’ Fee Ruling
The fee award matters to class members because it comes out of the same fund the payments do. Plaintiffs’ counsel asked for $4,362,500, which was 25% of the total settlement value and a 2.25 multiplier on roughly $2.58 million in logged hours. Judge Chhabria called that request unreasonable, pointing out that the settlement was not a substantial portion of the potential maximum recovery, that the injunctive relief had largely been achieved through a separate consent judgment with the Missouri Attorney General, and that the case never reached litigation on the merits — no motions to dismiss or for summary judgment were ever filed.9TaxAct Class Settlement. Order Granting in Part Motion for Attorneys’ Fees
The court awarded $3,873,036.08 in fees (about 22.2% of the cash fund), denied counsel’s request for 25% of the in-kind Xpert Assist relief and instead awarded 10% of claimed in-kind relief with a $580,000 holdback, approved $57,558.36 in litigation expenses, and cut the service awards to the five named plaintiffs from $10,000 each to $5,000 each.
Not the Only Tax-Prep Pixel Case
A July 2023 congressional report confirmed that TaxAct, H&R Block, TaxSlayer, and Ramsey Solutions had shared millions of customers’ financial data with Meta and Google, and described the companies as acting with “stunning disregard for taxpayer privacy.”5The Hill. Tax Preparers Shared Personal Data With Meta, Google: Senate Report Separate litigation is moving against other preparers. In a case involving Meta and H&R Block in the Northern District of California, Judge P. Casey Pitts dismissed some state-law claims in August 2024 but allowed federal wiretap, state invasion-of-privacy, negligence, and unjust enrichment claims to proceed.10Courthouse News Service. Meta Wins Bid to Toss Several Privacy Violation Claims in H&R Block Breach Lawsuit
In October 2024, Senators Elizabeth Warren, Ron Wyden, and Richard Blumenthal, along with Representative Katie Porter, urged the Department of Justice to open a criminal investigation into TaxSlayer, H&R Block, TaxAct, and Ramsey Solutions for potentially violating Internal Revenue Code Section 7216, which prohibits tax preparers from disclosing return information for purposes beyond preparing the return.11Thomson Reuters Tax & Accounting. DOJ Urged to Look Into Tax Prep Companies’ Privacy Practices Whether that investigation happens will not affect the TaxAct class settlement, which remains a civil matter awaiting the Ninth Circuit’s decision.