IRS pardons late TurboTax filers; users still mad at Intuit

The TurboTax maker told them to keep trying to file despite server woes

The U.S. Internal Revenue Service yesterday gave frustrated Intuit Inc.'s TurboTax users an extra 48 hours to submit their returns without penalty after they were unable to electronically file Tuesday night on the company's overloaded servers.

Taxpayers and tax professionals using TurboTax or other Intuit tax preparation software and services have until midnight tonight to file their returns. "The IRS will not apply late filing penalties to taxpayers who were affected by this problem," the federal tax agency said in a statement.

On Tuesday -- the filing deadline for federal income tax returns this year -- an unexpectedly high volume of last-minute filers brought Intuit's back-end system to its knees. By midday Wednesday, Intuit said returns were being processed normally, and that the server load issues had been resolved.

"If you haven't already done so, please resubmit your tax returns now," a forum administrator wrote on the company's support site. "If you have already filed, you can now check status for confirmation that it has been received."

Intuit's biggest rival in the consumer tax preparation market, H&R Block Inc., didn't take long to make hay over its competitor's woes. Today, the Kansas City, Mo.-based maker of TaxCut said it would reimburse IRS late penalties for anyone who used its software or online service to file a return. The two caveats: taxpayers must file by midnight Saturday, April 21, and the maximum reimbursement is $100.

"We want to extend late filing benefits to all taxpayers, not just those impacted by the Northeast storms or another company's e-file issues," said Tom Allanson, group president of the company's digital tax division.

Although Intuit's stock price hasn't taken a hit from the problem -- since Tuesday's opening, Intuit shares have climbed 71 cents to $29.46 -- many users on the company's forums remain angry. Some blamed Intuit's advice for adding to the debacle.

"The lack of communication last night was appalling," wrote a user identified as Scott Waddell. "The advice the administrators provided on this message board was simply 'keep trying,' and that jammed up the server even more."

To make matters worse, Intuit spokesman Harry Pforzheimer was quoted by the Associated Press as saying "Don't wait until the last minute is the moral of the story," a comment that enraged users even more.

"Maybe they should have put that Associated Press quote on a big red sticker on the front of the TurboTax box?" said kosh on an Intuit forum.

"It is no [sic] our fault that their servers failed," said Better_Late_Than_Never. "I always wait to the last day and it has never been a problem before now. Procrastinators Unite!"

Yesterday afternoon Pforzheimer claimed that he had been misquoted by the AP reporter. "When asked by the reporter if the demand was caused by 'late tax filers and if this should cause folks not to procrastinate,' my comment was 'yes this was caused by last minute filers, but our customers should expect a good e-filing experience and to be able to file anytime they desire during the tax season," he said.

That didn't stop users from bashing Intuit and swearing to never use its tax prep products again.

"Blaming the customer for your crappy service is a shoddy move, sir," said lindyntn. "The least you could do is own up to your mistakes, apologize for it without making any backhanded reference to it really being our fault for your failure to perform, and stop giving people the runaround who want their money back per your own guarantee."

Copyright © 2007 IDG Communications, Inc.

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