Tax-Preparers Servers Crash, But IRS Waives Late Fees

April 19, 2007

Yesterday the U.S. Internal Revenue Service said that any taxpayers who could not file electronically using Taxpayers who couldn't electronically file 11th-hour returns using Intuit Inc.'s TurboTax, ProSeries and Lacerte software won't be penalized.

"We will do everything we can to assist taxpayers affected by the situation," said IRS spokesman Bruce Friedland said yesterday. "If people couldn't e-file last night, we encourage them to file as soon as they can."

This morning, the IRS says it has extended this deadline to Midnight, tonight (local time of the taxpayer).

This procedure involves processing of these returns by Intuit, and then Intuit's servers transmitting the processed returns to the IRS.

The problem started Tuesday evening when an excessive number of last-minute filings choked Intuit's computers. The crush lengthened the time between submitting taxes to receiving confirmations from the customary few minutes to several hours. And once server capacity was reached by Intuit, an as-yet undetermined number of returns were unable to be processed by Intuit.

The incident occurs with a backdrop in which the IRS says taxpayers filed more than 75 million returns electronically through April 17, shattering last year’s record of 73.2 million.

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