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Intuit, IRS delays rile online tax filers

An Intuit power outage and backlogs at the IRS have led to delays in processing returns via TurboTax.

As record numbers of people get online to file their tax returns, an Intuit power outage and Internal Revenue Service backlogs have coincided to delay confirmations of those returns, leaving some electronic filers in limbo.

The delays have frustrated electronic filers, who are accustomed to speedier confirmations. A thread on Excite's TurboTax message board has logged more than 100 messages dating back to February 4 on the topic of the delays.

Intuit blamed the IRS for the trouble earlier this month, and partially for more recent delays as well. The IRS acknowledged that confirmations for electronic return filings were slower than usual this year because of high traffic. Last week there was trouble with a "major filer" and a subsequent glut of filings over the holiday weekend.

But the IRS stressed that none of its confirmations exceeded its self-imposed 48-hour window for turning around confirmations.

The IRS has 10 service centers around the country, five of which process electronic filings. The service has started diverting 40 percent of its traffic from the Cincinnati center to the Memphis center, which uses more modern equipment. Next year, the IRS plans to process all of its electronic filings out of Memphis.

Intuit has also contributed to the delays, suffering an internal power outage Monday afternoon. Though the outage lasted just 10 minutes, it took the company more than 24 hours to double check the system prior to bringing the power back up, hobbling the TurboTax online services until last night.

Intuit is investigating the cause of the outage.

Both the IRS and Intuit blamed the longer-than-usual turnarounds for confirmations on an increase in electronic filings this year. As of Friday, the IRS had handled 13.3 million returns so far this year, 11 percent more than the same period last year.

Reliability and customer service are twin challenges facing e-commerce and other Web-based services. A recent pricing debacle at Buy.com cost that Web site more than $60,000 and considerable customer service credibility.

Those filing electronically using TurboTax griped about the delays, but the delays have not turned them off online filing.

"Using Quicken and Intuit has saved me hundreds of dollars, maybe thousands," noted one News.com reader. "But it's still irritating that a company that makes such fine software can't do a little better on customer service basics."