E-Filing Swamps Turbo Tax

I've been using Turbo Tax to file my income tax returns for probably 15 years or more. When I first started you had to print the computer generated returns and mail them in (which you can still do today if you wish), but for quite a few years now I've used their eFile service to electronically send the returns. No paperwork, no stapling W2's and other forms, and no chance of lost mail.

My returns went in Friday night without any problem. I got emails confirming acceptance within a few minutes. But for many filers who waited until literally the last minute, the Turbo Tax system overloaded and some may face penalties for late filing:

A California company that makes the popular TurboTax and ProSeries tax software said it expected to hear from the Internal Revenue Service Wednesday whether any taxpayers who used its e-filing system would be penalized for submitting late returns.

A flood of last-minute tax filers swamped the servers of Intuit Inc. on Tuesday, causing hours-long delays in getting forms sent in electronically to the government, said Harry Pforzheimer, a spokesman for the Mountain View-based company.

"We have talked to the IRS because of the amount of returns we are still filing," Pforzheimer said. "It's fair to say the IRS understands what the situation is."

A record number of returns from both individual taxpayers and accountants started causing delays early Tuesday in customers receiving online confirmation their tax returns were submitted successfully, he said.

As the midnight filing deadline approached, the problem got worse. During times of peak demand, Intuit was processing 50 to 60 returns per second, he said.

"The amount of filing that has been done today has been absolutely amazing, and we are doing everything we possibly can to expand capabilities of servers," Pforzheimer said.

While stopping short of promising that filers whose returns failed to reach the government on time would not face late fees, he described the IRS as sympathetic.
"Don't wait until the last minute is the moral of the story," he said.

There are usually two reasons for filing at the last minute - people who will owe additional taxes don't want to pay them until the very end, and people who just don't get around to it. One of the features of Turbo Tax that some people may not know about is that you can file your tax anytime but schedule the payment to occur on tax day. That way you don't send your money in any earlier than you have to. It will also save you from getting caught in the deluge of bits and bytes that flood the system on the final day.