TurboTax Faces Multiple Class Actions, Free Filing Fraud, Data Breaches, and Privacy Violations
The TurboTax class action lawsuit 2025 involves multiple legal actions against Intuit, including claims that TurboTax facilitated fraudulent tax filings and identity theft by failing to implement adequate security measures. Additionally, TurboTax faces privacy violation claims alleging improper collection and sharing of sensitive user information through tracking technology, with eligible claims potentially worth up to $2,500. A previously settled $141 million case resulted in payments to 4.4 million consumers who were charged for services that should have been free, with checks of $29 to $30 already distributed.
What Are the Active TurboTax Lawsuits in 2025?
Three separate legal actions target Intuit in 2025, each addressing different violations.
Identity Theft and Fraud Claims
Morgan & Morgan filed a class action alleging Intuit facilitated fraudulent tax filings and identity theft because it failed to implement security measures that would have better protected users’ sensitive information, and when employees identified millions of TurboTax accounts being used for filing fraudulent returns, company management allegedly forbade workers from flagging or turning off the accounts.
The lawsuit claims TurboTax customers, as well as individuals who never used the software, had fraudulent returns filed in their names and continue to be at increased risk for identity theft.
Privacy Violations Through Tracking Technology
Labaton Keller Sucharow alleges that TurboTax, through its use of Twilio’s tracking technology, improperly collected and shared sensitive user information without user knowledge or consent. The case involves Twilio’s software development kits that allow TurboTax to collect and share details about how users interact with the service, potentially sending information that can personally identify users.
2024 Data Breach Lawsuit
A class action filed in July 2024 alleges Intuit lost control over users’ sensitive data when hackers infiltrated its systems between December 2023 and February 2024, compromising consumers’ names, Social Security numbers, driver’s license numbers, dates of birth, and financial details. Plaintiff Joseph Garite claims he suffered identity theft and fraud after the breach, receiving a fraudulent IRS letter containing his Social Security number and exact tax amount owed in 2023.
Who Qualifies for the TurboTax Class Actions?
Each lawsuit targets different groups of affected consumers.
Fraud and Identity Theft Claims: You may qualify if you received a bill from TurboTax even though you never used the software, had someone file a fraudulent tax return using TurboTax under your name, or were double billed by TurboTax with one charge stemming from a fraudulent filing.
Privacy Violation Claims: If you used your TurboTax account within the last three years, you may be entitled to bring a claim under federal and state privacy laws, with eligible claims potentially worth up to $2,500.
Data Breach Claims: The class action includes all U.S. residents whose personal identifiable information was compromised in the data breach that Intuit disclosed in March 2024.
What Legal Violations Are Alleged?
The lawsuits cite multiple violations across consumer protection, privacy, and data security laws.
The fraud lawsuit alleges Intuit knew or should have known about the recent increase in fraudulent tax filings and data breaches but failed to take commercially reasonable measures to protect customers’ information, giving cybercriminals easier access to residential addresses, birth dates, Social Security numbers, bank account numbers, and financial information that facilitated filing thousands of fraudulent tax returns.
The privacy lawsuit claims violations of federal and state privacy laws and state consumer protection laws through unauthorized data collection and sharing.
The data breach lawsuit asserts claims for negligence, negligence per se, breach of implied contract, invasion of privacy, unjust enrichment, breach of fiduciary duty, declaratory judgment, and violation of California’s Unfair Competition Law and Consumer Privacy Act.
The $141 Million Settlement: Already Paid
Many consumers confuse ongoing lawsuits with the resolved free filing case.
Intuit agreed to a $141 million settlement with state attorneys general to compensate TurboTax customers who paid for services that should have been free for tax years 2016, 2017, and 2018, with about 4.4 million consumers receiving payments of $29 or $30 automatically through checks mailed in May 2023.
The settlement resolved allegations that Intuit misled consumers about accessing free tax filing products, steering customers to paid TurboTax products instead of free IRS Free File options despite their eligibility. This case is closed—no additional claims can be filed.
Current Case Status and Timeline
The active 2025 lawsuits remain in different stages of litigation.
Fraud and Security Lawsuit: Morgan & Morgan’s fraud lawsuit continues to accept potential class members who experienced fraudulent TurboTax filings or identity theft. The case appears active based on July 2025 updates on the law firm’s website.
Privacy Violations: The Twilio tracking lawsuit involves individual arbitration claims against Twilio for violating federal and state privacy laws. The law firm actively recruits claimants who used TurboTax within the past three years.
Data Breach Case: The data breach lawsuit was filed on July 1, 2024 in California federal court. The case remains in early litigation stages without settlement announcements.
How Much Compensation Can You Receive?
Potential compensation varies significantly by lawsuit type.
Privacy violation claims may be worth up to $2,500 per eligible claimant. The exact amount depends on arbitration outcomes and individual circumstances.
The 2018 fraud settlement involving account takeover attacks affected approximately 915,000 victims, but specific compensation amounts for current fraud claims remain undetermined as cases proceed through litigation.
Data breach compensation typically includes credit monitoring costs, identity theft recovery expenses, and potential statutory damages. Amounts will be determined through settlement negotiations or court judgments.
How to File a Claim or Join the Lawsuit
Each lawsuit requires different action steps.
Fraud Claims: Contact Morgan & Morgan directly through their website or call their intake line. Provide documentation showing fraudulent TurboTax charges, IRS notifications of fraudulent returns filed in your name, or bills from TurboTax for services you never used.
Privacy Violations: Visit Labaton Keller Sucharow’s case page to determine eligibility and file a claim. You’ll need to confirm you used TurboTax within the last three years and consent to arbitration proceedings.
Data Breach: Current and former Intuit users do not need to do anything to be involved initially—you’re automatically included if you received breach notification from Intuit. Watch for official settlement notices if the case resolves.
Why Did These Lawsuits Happen?
Multiple security failures and business practices triggered litigation.
Pattern of Inadequate Security
The 2024 data breach appears to be part and parcel of a pattern of inadequate data security for Intuit, with TurboTax users targeted in takeover attacks in 2014, 2015, and 2019, where the 2019 method was nearly identical to those used in 2014 and 2015.
When Intuit employees identified TurboTax accounts being used solely for fraudulent tax filings, the company allegedly told them not to flag or deactivate the accounts. While security experts told Intuit the company should add certain safety measures to protect TurboTax customers, the company did not implement these very basic security measures until years later.
Prioritizing Profits Over Protection
Former security employees of Intuit, including one who filed an official whistleblower complaint with the SEC, reported that the company had made millions of dollars knowingly processing state and federal tax refunds filed by cybercriminals.
The lawsuit claims companies such as Intuit must be diligent in recognizing fraud and abuse, reporting it to the IRS, and working to prevent fraud while safeguarding information that could be used to file fraudulent returns; however, Intuit’s lax security measures did not meet these standards and actually facilitated tax fraud on TurboTax.
Real Victims’ Stories
Court filings document specific harm to consumers.
Christine Diaz purchased TurboTax software in 2011 but never used it again, yet in January 2015 she was notified that federal and state tax returns were filed under her name using the software and received a bill for more than $200 for fraudulent returns. As a result, Diaz is now ineligible for online tax filing, faces increased identity theft risk, and must pay for ongoing credit monitoring.
Michelle Fugatt never used TurboTax but was notified in March 2015 that someone had filed a tax return under her name using the software. Like Diaz, Fugatt spent significant time rectifying the situation, is no longer eligible for electronic filing of tax returns, and faces increased risk of future identity theft requiring indefinite credit monitoring.
Comparing TurboTax to Other Tax Software Litigation
TurboTax isn’t alone in facing legal challenges over security and marketing practices.
H&R Block faced similar issues, with Hilliard Law serving as lead class counsel in a case involving every Texan who received a rapid refund from H&R Block (approximately 300,000 plaintiffs), forcing H&R Block to disclose it received kickbacks for arranging loans between tax preparation clients and predatory lenders.
The scale of TurboTax’s alleged failures appears larger. Attorney John Yanchunis stated they anticipate tens of millions of potential class members as TurboTax appears to have been the conduit to filing false tax returns arising from the Anthem, Premera, and Blue Cross Blue Shield data breaches.
State-Level Impact
Multiple states suspended TurboTax filings during fraud crises.
Alabama tax officials reported identifying as many as 16,000 suspicious tax returns through TurboTax, Minnesota tax officials stopped accepting individual tax returns transmitted through TurboTax, Massachusetts and Vermont officials announced they temporarily stopped issuing tax refunds to avoid issuing fraudulent tax refunds, and Utah tax officials announced that all potentially fraudulent tax returns identified in the state had been filed through TurboTax.
Common Misconceptions About the Lawsuits
Several myths circulate about TurboTax litigation.
Myth: The settlement provides free TurboTax service. The TurboTax settlement over free edition was resolved by payment to class action members and did not provide free use of the TurboTax software for future tax years.
Myth: You must actively join class actions. Current and former Intuit users do not need to do anything to be involved in proposed class action cases when initially filed—it’s usually only in the event of a class action settlement that people covered by litigation need to act by filling out claim forms.
Myth: Only TurboTax customers are affected. The lawsuit claims TurboTax customers as well as individuals who never used the software had fraudulent returns filed in their names. Non-customers victimized by fraud through TurboTax may qualify for compensation.
What Should You Do Now?
Take these steps to protect yourself and preserve legal rights.
Check Your Records: Review tax filing history for unauthorized returns. Request IRS transcripts showing all returns filed under your Social Security number.
Monitor Credit Reports: Watch for suspicious activity. The FTC provides free resources at IdentityTheft.gov.
Preserve Documentation: Save emails, bills, or notices from TurboTax, especially charges for services you didn’t use or notifications about your account.
Contact Attorneys: If you experienced fraudulent filings, received unexpected TurboTax bills, or used TurboTax in recent years, consult lawyers handling these cases. Consultations are typically free.
Report Identity Theft: File reports with the FTC and local police if you discovered fraudulent tax returns. These documents support legal claims.
Don’t Delay: Statutes of limitations may bar claims filed too late. Act promptly if you believe you were affected.
Legal Precedent and Implications
These cases could reshape how tax software companies handle security.
On March 12, 2020, a court denied Intuit’s Motion to Compel Arbitration in earlier litigation, allowing claims on behalf of consumers to proceed before one judge in federal court rather than in confidential binding arbitrations. This ruling established important precedent for collective action against Intuit.
The outcome of current lawsuits may force industry-wide security improvements. Companies failing to implement basic protections could face substantial liability for facilitating fraud and identity theft.
Resources for TurboTax Lawsuit Victims
Several organizations provide assistance:
- Morgan & Morgan: Handles fraud and identity theft claims (forthepeople.com)
- Labaton Keller Sucharow: Manages privacy violation arbitrations (lantern.labaton.com)
- IRS Identity Protection: Free PIN program for victims (irs.gov)
- FTC Identity Theft: Recovery plans and reporting (identitytheft.gov)
- Credit Bureaus: Free fraud alerts and credit freezes
For more information on protecting yourself from consumer protection issues or understanding your identity theft rights, consult legal resources. If you’re dealing with related matters, you might also want to review information about debt collection practices.
Frequently Asked Questions
What is the TurboTax class action lawsuit 2025?
Multiple active lawsuits exist in 2025: one alleging TurboTax facilitated fraudulent tax filings and identity theft by failing to implement security measures, and another claiming improper collection and sharing of user information through tracking technology. A third lawsuit addresses a 2024 data breach compromising Social Security numbers, dates of birth, and financial details.
Who is eligible for the TurboTax lawsuit?
You may qualify if you received bills from TurboTax you never used, had fraudulent tax returns filed through TurboTax in your name, or were double billed with charges stemming from fraudulent filings. Anyone who used TurboTax within the last three years may be eligible for privacy violation claims.
How much compensation can I get from the TurboTax lawsuit?
Privacy violation claims may be worth up to $2,500 per person. Fraud and data breach compensation amounts remain undetermined as cases proceed through litigation. The previously settled free filing case paid $29 to $30 per affected consumer.
How do I file a claim for the TurboTax class action?
Contact Morgan & Morgan for fraud claims or Labaton Keller Sucharow for privacy violations directly through their websites. For the data breach lawsuit, you don’t need to do anything initially if you received breach notification—you’re automatically included.
What is the status of the TurboTax settlement?
The $141 million settlement for free filing fraud was finalized and payments of $29 to $30 were mailed to 4.4 million consumers in May 2023. This case is closed. Current 2025 lawsuits remain in active litigation without settlements announced.
Can I still join the TurboTax class action?
Yes, if you experienced fraud, identity theft, privacy violations, or data breaches related to TurboTax. Contact the law firms handling these cases to determine eligibility. You’re automatically included in class actions when filed—formal claim forms are only required if settlements occur.
What should I do if I received a fraudulent TurboTax bill?
Preserve all documentation, file an IRS identity theft affidavit, report to the FTC at IdentityTheft.gov, contact the attorneys handling fraud claims, and monitor credit reports for additional suspicious activity.
Disclaimer: This information is for educational purposes only and does not constitute legal advice. TurboTax lawsuit eligibility, compensation amounts, and claim procedures vary by individual circumstances and applicable law. Consult official court documents, case information, or a qualified attorney for specific guidance regarding TurboTax lawsuit participation or claim filing.
About the Author
Sarah Klein, JD, is a licensed attorney and legal content strategist with over 12 years of experience across civil, criminal, family, and regulatory law. At All About Lawyer, she covers a wide range of legal topics — from high-profile lawsuits and courtroom stories to state traffic laws and everyday legal questions — all with a focus on accuracy, clarity, and public understanding.
Her writing blends real legal insight with plain-English explanations, helping readers stay informed and legally aware.
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