Turbo Tax Melts Down on Tax Day

Raven17 writes "Turbo Tax by Intuit completely melted down under the load from last minute filers. Some people have been having problems as long as 24 hours already. I surrendered 2 hours before the East Coast deadline and schlepped on down to the Post Office."

Comments

Back up at the wire

[kannibal_klown]

My mom used TurboTax (I got stuck w/ TaxCut this year). Anyway, she said it came back up just a few minutes before midnight. People were flipping out.

Personally, I did mine back in February.

Re:Back up at the wire

[TheRealFixer]

I did the same. I think it was back in 2002. Caused a huge black eye for Intuit because they took forever to acknowledge there was a problem.

I've been using TaxCut online since 2003, and it works great.

Re:Back up at the wire

[LordKronos]

I think it was probably a bigger black eye for H&R block last year (or was it the year before) when they mailed out a bunch of TaxCut CDs to past customers and put their SSN on the address label.

Re:Back up at the wire

[ryanov]

The taxpayers may be saving money in salaries, but $16.95 goddamn dollars to file? Forget it, let them open my letter.

If it's going to save the government money, why should I pay for it?

Re:Back up at the wire

[Asphalt]

Um, because they are getting paid YOUR TAX DOLLARS to open the letter?

Actually they aren't. Nobody working for the government gets paid with "YOUR TAX DOLLARS".

They get paid with Federal Reserve Notes well before you remit any of your earnings. And they will get paid whether you remit anything or not. Because there is a printing press that will give it to them regardless.

Your tax Reserve Notes go to the Federal Reserve to prevent devaluation of the currency. And since the "money" is created out of thin air, that's really the only reason you pay taxes.

The more dollars the general population has, the less a dollar is worth. So taxation serves to remove as many dollars out of circulation as possible, thus supporting the fiat currency.

When you pay FEDERAL taxes, you are not directly paying for any employees or programs ... as the money is simply printed and given to the Federal Government on demand, to distribute to whomever they want. So why, if money is printed on demand, does the Federal Reserve need YOUR money? They can create as much as they want. They don't need yours.

The reason is value. The more money YOU have, the less *value* your neighbor's money has and the government's money has.

Federal taxation doesn't pay for anything, it simply removes monetary supply from the hands of the populace. Less supply = more demand = curtailed inflation.

In short, your are not paying for anything with taxes. You are just supporting the perceived value of paper and ink that has no intrinsic value in and of itself.

Re:Back up at the wire

[profplump]

Who the f*** decided that sentences on the Internet shall no longer be formatted with two spaces after a period?! The doubled space after after a period rule was a hack to deal with the hard-to-read mono-spaced fonts on old computer and typewriters. Set type never used a double space after a period, before or after typewriters -- they used 1.5 spaces. And if your fonts are worth anything, they should approximate that 1.5 spaces with a full stop and a single space.

Re:Back up at the wire

[crabpeople]

You should watch a doc called 'money, banking and the federal reserve'. For every real dollar in the system, the fed loans about 10k to the banks. The american dollar hasn't been backed by gold since nixon killed the gold standard in the 70s. You could say that the american dollar is kept afloat on the global stage because its a petro dollar, people use it to buy oil. This is why iraq (2000) and iran (recently) have switched to euros. Iraq got bitchslapped back into dealing in USD, but if somewhere like saudi arabia started dealing in euros there would be big problems for the us.

Re:Back up at the wire

[gnuman99]

Saudis are already using Euros *and* USD for oil. Virtually all of Europe is using Euros only to get their oil. Russia is selling their gas to Europe in EUR as well.

I can't believe that Iran switched 100% to using EUR for oil. China is their biggest customer and they have tons of USD to spend. They probably have tons of EUR as well, but they probably have more USD at this point.

Re:Back up at the wire

[LordKronos]

Are you telling me you bought a piece of software AND GAVE THEM YOUR SSN? For what?

Well, probably because the IRS doesn't accept tax returns where the SSN field is blank.

Re:Back up at the wire

[ThosLives]

Except that's not at all how the government controls money supply: The Federal Reserve is the source/sink of dollars, not the IRS.

Money supply is controlled by the sale and purchase of bonds and the interest rate, not through taxes. This is why the Fed uses the interest rate to affect inflation. It's the effect on the amount of cash the Fed has to pay out to 'buy back' its bonds. Basically, if the Fed wants more cash in the market, it buys bonds more than it sells them; if it wants to curtail the money supply, it buys fewer bonds back than it sells. Note that the Fed target interest rate is based on the supply and demand for the notes. Also note that it's a target rate - the media and literature always calls it "the target federal funds rate". Because to get that rate, the Fed has to buy or sell its bonds. To increase the rate and "slow down" the economy, the Fed sells more bonds. The reason this increases the rate is because to sell more bonds, it has to make them more lucrative to the purchaser which means a higher interest rate. What happens then is the buyer gives dollars to the Fed in exchange for a bond. Note that a bond is not money, so money has effectively left the money supply.

When the Fed wants to reduce the interest rate, it starts selling fewer and fewer bonds (or buying bonds back). This reduces the supply of bonds so, for a given demand, the "price" the buyers are willing to pay (a lower interest rate) increases. Either way, this either puts dollars directly back into the economy via a buy-back, or indirectly because fewer people are buying the bonds so their cash stays in the system. Buying back takes bonds out of the free market and replaces them with dollars.

This mechanism, while not perfect, also helps adjust the money supply to a larger economy, because when real wealth is created in the economy, the creator of that wealth gets more dollars and more bonds are purchased. When those bonds are purchased back or redeemed for face value plus interest, there is an increase in available dollars. Inflation happens when the market guesses wrong at the interest rate, and more dollars are paid out during redemption than is representative of the current actual wealth. Similarly, if the economy contracts the money supply can also contract because eventually the interest rates on the bonds will fall and less additional money is required to redeem the notes; this will reduce the money supply relative to the amount of wealth. Stagflation happens when the nasty effect of a shrinking economy is paired with increasing inflation. (Yay for basic macroeconomic theory).

Another key thing to remember is that the Fed and money supply only control the tokens representing value in the US; they don't directly control wealth (and, as is important to note, value and wealth are not the same thing).

I submitted mine

[Timesprout]

on my blackberry.

Perhaps

[niiler]

Sourceforge could help them with their server load next year :-)

Only Fools Wait Until The Last Minute

[NeverVotedBush]

It was basically a manual DNS attack. With so many waiting until the last minute, what do people expect? File at least a day before the deadline. What difference does a day's worth of interest make on the average IRS tax bill? And if people are so concerned about a day's worth of interest, print the damn return and mail it with a check. That way you get a few more days of interest.

I just don't understand the dorks that wait so long they have no options.

Re:Only Fools Wait Until The Last Minute

[Mr. Underbridge]

It was basically a manual DNS attack. With so many waiting until the last minute, what do people expect? File at least a day before the deadline. What difference does a day's worth of interest make on the average IRS tax bill? And if people are so concerned about a day's worth of interest, print the damn return and mail it with a check. That way you get a few more days of interest.

All true, but the fact that people wait until the deadline is not news. If you're going to get into the online tax-prep business, you'd better have a stout server. This kind of failure can kill a business.

Re:Only Fools Wait Until The Last Minute

[tehSpork]

All true, but the fact that people wait until the deadline is not news. If you're going to get into the online tax-prep business, you'd better have a stout server. This kind of failure can kill a business.

Or a stout series of servers, God knows you shouldn't be relying on a single box to handle that information with that liability.

Re:Only Fools Wait Until The Last Minute

[powermacx]

Losers. I did my taxes last year. - Homer

Re:Only Fools Wait Until The Last Minute

[Maximum Prophet]

I'm using my poor memory here but there are something like 180 million filers, 60% of which use Tax software or professional help (almost all the professionals use Tax software)

TurboTax should know it's market share, let's pretend it's 75%. That's 180,000,000 * .60 * .75 * .20 = 16.2 million on the last day. Let's say most, 75%, wait until the last half of the day, that's 8.1 million in the last 12 hours. That's 187 per second.

On NPR they gave a figure that the TurboTax servers were processing like 40 per second.

I do peak load extimation for Unix servers for a living. Somebody at TurboTax screwed up big time, real big time. They should have doubled the number of servers they thought they might have needed. They should have contracted with a company like Google to cache the returns, then process them batchwise as fast as they could.

Re:Only Fools Wait Until The Last Minute

[LordKronos]

File at least a day before the deadline. What difference does a day's worth of interest make on the average IRS tax bill?

File a few weeks before. When you file and when you pay can be different, so you aren't actually losing any interest. You can file in January but tell the IRS to deduct it from your bank account on the due date in April. Or you can do the same if you are paying by check (file in January, mail check in April).

Re:Only Fools Wait Until The Last Minute

[sloveless]

You don't get penalized for filing a federal return late if you're getting a refund. A few years back, before I started filing electronically, I prepared my taxes, noticed I was getting a nice little refund, and promptly failed to put it in the damn mail. It was December before my lazy butt realized I hadn't received my check. (No, I'm not exaggerating.) So I mailed it. The IRS promptly issued my refund PLUS INTEREST! Granted, it was a crappy rate and I would have been better off putting that money in a savings account. Regardless, no penalties.

Re:Only Fools Wait Until The Last Minute

[Anonymous Coward]

They should have contracted with a company like Google to cache the returns

Excellent, then my tax return could be stored along side my e-mail, calendar, documents, searches, and every website I've visited that uses Double-click or Google ad services ... in fact, can't Google just fill out my returns automatically now, with the info they have?

Re:Only Fools Wait Until The Last Minute

[Peter Mork]

As long as they owe you a refund, nothing bad happens if you file a day late.

My gut reaction was that you still have to file on time. But, I stand corrected and I think you for the information.

Re:Only Fools Wait Until The Last Minute

[GoRK]

I didn't get the figures for my last 1099 until YESTERDAY. Kinda makes filing hard ya know.

No it doesn't. They missed the filing deadline; not you. What you are supposed to do here is timely file your 1040 without that information then re-file your 1040 when you get the additional information then either pay the difference with interest or claim the difference as a refund (in many cases this is with interest too). Optionally you can include estimated tax payments on your first 1040 filing if you want to avoid paying interest when you file again. Your final easy option is to file form 4868 for an extension along with your estimated payment. If you expect a refund the best thing is to file 1040 twice so you can go ahead and get your money back. If you expect to pay, the 4868 is much simpler.

for those of us that done speak Yiddish

[otacon]

schlep : to drag or haul (an object); to make a tedious journey (from Yiddish shlepn; cf. German schleppen)

As a Hog Farmer

[ReidMaynard]

I shipped my 15% (30 hogs) early, to avoid problems just like this

It's so unfair

[Aaron_Pike]

If only there were some way to file in March, or even February. But that could only happen if employers had a deadline to send out W-2 forms by like the end of January.

Re:Turbotax Issues

[Applekid]

"(at least a got a refund though...albeit little bitty)"

Because someone has to say it:

Getting a refund compared to having to pay is bad. The government collected too much in taxes (well, more than they are required to by law). This money was denied to you throughout the year. Money which could have been earning interest, used for investments, hell, eating out a few more nights a month.

You get your refund back interest-free from the gov. It's really no different than if you left a $20 in your coat pocket during the winter only to find it the next year. Sure it FEELS GOOD, but, that could have been doing something much more useful than just sleeping in a pocket.

Then again, there are penalties imposed if you fix your W-4 (and other forms) so that they don't withhold anything and you have to pay all your tax once a year. I think that's too bad.

Re:same as in real life

[tha_mink]

In real life, and online, you can get much better results by filing a day earlier. Not true with Turbo Tax, they were melted on Monday too. The meltdown's been reported on the boards since Monday morning.

Re:Netcraft confirms

[__aaanwh8370]

TurboTax.com does not host the online TurboTax application - that's the brochure-ware for turbotax. Those servers also do not host Intuit's electronic filing services (which are hosted indenpendently from turbo tax online as well).

The TurboTax web app is hosted @ www.turbotaxonline.com and still runs on Solaris (http://uptime.netcraft.com/up/graph?site=www.turb otaxonline.com)

For next year...

[Avatar8]

Will Intuit learn their lesson and strengthen their servers and network for next year's last minute rush? Given their track record of quality, I seriously doubt it.

Will the procrastinators learn their lesson and file at least a day early? Heck no. They even had two extra days this year. If paying the taxes is the issue, that's what an extension is for.

I am a horrible procrastinator myself, but I guess my greed overpowers that. My taxes were done, returned and spent in February. Woot! New PC!

I also learned a few years back that Turbo Tax is no better than most of the other products out there, free or otherwise. I've been using http://www.taxact.com/ for the past three years. I usually do the download, but I tried the web version for my mother-in-law's taxes. Very smooth, quick, painless and best of all, completely free. I did my mother-in-law's taxes Sunday, 4/15. That's the latest I've ever filed a return. Guess I'm getting sloppy like the unwashed masses.

2-day Extension

[flamingnight]

If you were affected by the storm that hit parts of the East Coast over the weekend, the IRS has granted a 2-day tax extension. Just write "April 16 Storm" on your return.

EULA

[Wisconsingod]

TurboTax online has a few key points in their EULA that will protect thiem from these fiascos.

to the maximum extent permitted by applicable law, intuit and its suppliers are not liable for any indirect, special, incidental, exemplary or consequential damages or for damages relating to loss of business, telecommunication failures, loss, corruption, security or theft of data, viruses, spyware, loss of profits or investment, tax positions taken by you, inability to file your return, or the like, whether based in contract, tort (including negligence), strict liability, product liability or otherwise, even if intuit or its suppliers have been advised of the possibility of such damages and even if a remedy set forth herein is found to have failed of its essential purpose.

the software and services are provided "as-is" and, to the maximum extent permitted by applicable law, intuit, its affiliates, licensors, participating financial institutions, third-party content or service providers, retailers, distributors, dealers and suppliers (collectively, "suppliers") disclaim all guarantees and warranties, express or implied, regarding the software or services, including any warranty of fitness for a particular purpose, title, merchantability, and non-infringement. intuit does not warrant that software or services are secure, free from bugs, viruses, interruption, errors, or other program limitations or my personal favorite, don't buy the software until you print clause....

you may use the software without charge up to the point you decide to print or electronically file your tax return. printing or electronically filing your return reflects your satisfaction with software, at which time you will be required to pay or register for the product.

Re:Turbotax Issues

[Zenaku]

That's all true, but I'd still rather get a refund every year than owe. The amount of interest that I would earn by having that money in my pocket throughout the year is not significant. In reality, it is non-existent, because (and here I'm just being honest with myself) I'd only end up pissing it away on small luxuries. The amount of extra money in my pocket each paycheck would only be enough to make me dine out more, upgrade my cable package, or buy a new ipod or something.

And then when my tax bill came at last, it would feel like a hardship.

This is because each time I get paid, I pay my mortgage and bills, transfer a fixed amount into my various savings and investment accounts, and consider whatever is left to be mine to play with.

By getting a refund at tax time, I may have missed out on the interest, but the "found" money is large enough that I won't be inclined to waste it -- I'll make a major purchase, pay off a loan, or -- now that the amount is big enough to mean something to me -- put it into an interest-bearing account or investment.

Plus, the fact that I'm getting a refund is motivation to file in February, and avoid this whole April 15th mess.

So yeah, giving the government an interest-free loan is mathematically foolish -- but when you take psychology into account it can be better than owing them.

Re:Turbotax Issues

[vorpal22]

Sure it FEELS GOOD, but, that could have been doing something much more useful than just sleeping in a pocket.

In my opinion, feeling good is highly underrated. If the psychological joy of getting money back on taxes outweighs the joy from interest incurred from having that money early for someone, then I don't see a problem. God knows we pay enough in entertainment costs in a year to make ourselves feel good.

You should be asking instead

[Shivetya]

why in the hell is the tax code so complicated we need computer programs to sort it out?

the real problem is the tax system and the fact that Congress does nothing to simplify it.

Money is a convention

[DragonHawk]

You are just supporting the perceived value of paper and ink that has no intrinsic value in and of itself.

Every word you wrote is absolutely true. From an economic theory standpoint, it's really quite a critical concept. As a philosophical statement, that was really quite deep and insightful (seriously). However, from a strictly pragmatic point-of-view, that is absolutely worthless.

Money is an abstraction which exists for convenience. It saves us from having to carry chickens to the gas station. Rather than being carrying chickens around, we say, here's an abstraction which we'll all agree to deal in. It's a lot easier and less messy than carrying chickens around. The first step was using tokens to represent chickens. Rather than carrying the chicken, we carried a token that represented a chicken. But it quickly became obvious that, hey, all I really care about is the value represented by the token. I don't care about the chicken (maybe I prefer beef anyway). So let's all just agree to say the token represents an abstract concept of value. Saves the trouble of keeping all those chickens around.

It's true that paying taxes "supports the perceived value" of the currency. So does any use of the currency. When I pay for my gas or Internet in US dollars rather than chickens, I'm supporting the currency. When I get paid in US dollars, I'm supporting the currency. When I browse Slashdot and look at the ends, that translates into resources used, which are paid for in US dollars, which supports the currency.

If you prefer, substitute some other tangible good, such as "cows", "cheese", or even "gold" for "chickens". It's all the same concept.