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As the midnight filing deadline loomed large for America's taxpayers Tuesday, users of TurboTax were frustrated by delays in the software's electronic filing system that caused many to miss the deadline. Luckily for them, the Internal Revenue Service understands.
In the third such extension this filing year, the IRS announced Wednesday that users of Intuit's (Nasdaq: INTU) software who couldn't file by midnight on April 17 had a two-day extension, until midnight on Thursday. Several hundred thousand last-minute tax filers were affected by the problems, according to IRS officials, including users of TurboTax, ProSeries, Lacerte and Intuit's Free File offering, TurboTax Freedom.
Earlier this week, the IRS also granted extensions following the Monday storm in the Northeast and the Tuesday shootings at Virginia Tech.
Everything Slowed Down
"We had some heavy traffic Tuesday afternoon, but nothing too significant," Scott Gulbransen, a spokesperson for TurboTax at Intuit, told the E-Commerce Times. "Then around 9:30 p.m. Eastern, we had record traffic, and everything just slowed down."
The hours before the midnight tax deadline are always one of Intuit's "huge peaks for the year," he said, and hundreds of thousands of people were filing each hour.
For some, their returns went through with no problems, but many others were given a message that their return couldn't be filed and that they should try again in two to four hours, Gulbransen explained. By Wednesday morning, Intuit had made enough capacity adjustments that everything was back to normal.
Identifying the Problem
Once its customers' returns are all in, Intuit will work on identifying what caused the problems. "It looks like capacity," Gulbransen said, "but there could have been other underlying factors at work. At this point, we just don't know."
In the meantime, the IRS extension is sure to be welcome news. Users of Intuit products needn't do anything special to alert the IRS to the reason for their delay, Gulbransen said, since the extension is being granted to anyone who files through the company's system.
H&R Block (NYSE: HRB), another of the nation's largest tax providers, was not affected by any such problems. "We have had extremely heavy volume, but no issues at all," Denise Sposato, a spokesperson for the company, told the E-Commerce Times.
Last-Minute Confusion
An extension of several tax breaks last fall could have contributed to the problems, according to Heather Bennett, an editor with Tax Analysts, a nonprofit legal publisher. Several such breaks -- affecting rules including the Alternative Minimum Tax and the Child Tax Credit -- became law after the IRS printed its forms and instructions, which resulted in some taxpayer confusion, she told the E-Commerce Times.
"That may have pushed people to wait until the last minute," Bennett said.
The IRS has seen a strong year for electronic filing, with more than 75 million returns filed electronically through April 17. Last year, 73.2 million were filed.
"E-file has increased, which is what the IRS and Congress want, but with that comes the risk of technical issues," Bennett noted. "This was bound to happen at some point."
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