Don't Mess With Taxes

Whenever I procrastinate, it seems that my lolly-gagging has a tendency to come back and bite me.

So when I write about e-filing and the option to wait until the last minute to send in your tax return, I also warn people about the possibility that some technical difficulty could pose a problem.

Maybe your computer will freeze up, forcing you to shut it down and start over, possibly from scratch if you haven't saved your tax-filing data. If that happens at 11:55 p.m. on filing deadline day (or rather, night), you're screwed.

Your Internet service provider run into a problem. All those late filers could overload the system, locking you all out at the worst possible tax-filing time.

Or your tax software could have an issue of its own. That happened back in 2007, when a glitch in Intuit Inc.’s TurboTax, ProSeries and Lacerte software meant that a lot of last-minute filers missed the deadline. Luckily for them, in that case the IRS waived late-filing penalties.

IRS e-file issues: And this year, the IRS itself is having some technical difficulties.

Over the long Columbus Day weekend, the IRS conducted a planned test of its mondernized e-filing system. It required that the system be shutdown for a few days.

But today, when the IRS tried to bring that e-file system back online, the agency couldn't get it to work.

And what's just four days away? Oct. 15, the final filing deadline for folks who got an extension to send in their 2009 tax returns.

The good news, reports the Associated Press, is that the incapacitation of the IRS's modern e-file system doesn't appear to be causing huge problems.

The computer system that's being balky right now isn't the one that the IRS has used for years. The agency's older e-file system is still working.

And, says the AP, large tax-prep companies like H&R Block and software manufacturers like TurboTax say their programs will default to the older version if the returns they e-file to the modernized system aren't accepted.

Plus, the IRS assures us that, "We have a group of experts diligently working the problem. We anticipate having the MeF System up no later than 5:00pm Eastern today."

So if you're one of the 10 million or so folks who got an extension earlier this year and have waited until the ultimate last-minute to fulfill your 2009 Form 1040 filing obligation, you should be OK.

The IRS is working on the problem (Yeah, I know; I cringe, too, when I hear IT guys -- government or private sector -- say that.) and you still have a few extended filing days to get your return in.

But the IRS computer/e-file issue is a good lesson. Don't wait until the 11th hour to file your taxes!

For more about last-minute filing and the price you could pay for not meeting IRS deadlines, check out my latest post on my Bankrate Taxes Blog, Tax filing deadline is Oct. 15.

Related posts:

• Final tax weekend tips (April 2010)
• Oct. 15 tax deadlines looming (2009)
• Final filing deadline is tomorrow, Oct. 15 (2008)
• Filing deadlines: 9/15 and 10/15 (2008)

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