Although most taxpayers still file their returns through the mail, the outage created a furor among users of the electronic Intuit (Nasdaq:INTU) services, TurboTax, one of the most popular tax-preparation software packages, and WebTurboTax, an Internet-based preparation service (www.webturbotax.com).
Jennifer Roberts, a spokeswoman for Intuit, blamed the outage on routine computer work that took far longer than anticipated amid the crush of last-minute tax filers. Intuit began a "backup," a computer process that makes a duplicate copy of its data, at midnight EDT, and it continued to run through 3:40 p.m.
Roberts said these processes are normally less disruptive, performed on Friday nights when there is less filing activity. The process usually takes about 11 hours. She said the company made the additional Monday night backup in anticipation of continued heavy filing activity through Thursday.
As of April 1 about 1.2 million tax returns had been filed via WebTurboTax and TurboTax, Ms. Roberts said, and an additional 60,000 have been filed since then.
"Doesn't it seem like pretty poor timing?" said Nigel Goldenfeld, a professor of physics at the University of Illinois, who was frustrated in trying to file his forms Tuesday using TurboTax. "Given that there may be some system problem, I am not going to trust it and will do a paper filing."
Other Intuit users lashed out in an electronic bulletin-board forum that the company operates on the Web.
Geoff Thomas, trade manager with a steam-ship company in Madison, N.J., said he tried repeatedly to file the forms that he prepared using TurboTax. "It makes you want to run for the paper copies. I find it a real scream that they cannot handle filings at this time of the year," he said.
Other electronic-filing services reported heavy traffic, but said their systems were operating properly.
Ray Kingman, president of Thomson Investors Network in Rockville, Md., said the company's electronic-filing program, OneTax.com, had some problems early in the tax-preparation season, but has run smoothly since then. Thomson is a unit of Canada's Thomson Corp.
H&R Block Inc. in Kansas City, Mo., which produces TaxCut Online, has accepted 600,000 electronic returns during the tax season, and hasn't had any computer failures, said Gene Goldenberg, vice president and publisher of the company's Block Financial Corp. unit.
Electronic tax-filing has grown rapidly this year, encouraged by the Internal Revenue Service, which is seeking to reduce paperwork. Companies like Intuit have attracted customers by promising faster refunds than taxpayers would receive through regular mail.