IRS got 59.3M e-filers

The Internal Revenue Service has just completed its best electronic filing season ever, with 59.3 million returns filed electronically, but not without a hitch, IRS officials said today.

On April 14, a period of peak filing activity, a critical server in the tax processing center in Austin crashed and, each time it was brought up, continued crashing. The problem continued for four hours before IRS managers went into "disaster recovery mode," said Estelle Tunley, deputy director for submission processing for the IRS.

At that point, IRS officials rerouted the incoming returns to the IRS' Memphis processing center, and no tax returns or data were lost. IRS technicians are still trying to figure out what caused the problem, Tunley said.

Speaking in Arlington, Va., at a meeting of the Council for Electronic Revenue Communication Advancement, a nonprofit trade group representing tax preparers, IRS officials said the total shut down in Austin came at the worst possible time, but it proved that the IRS systems could handle such problems.

The only consequence to taxpayers was that they waited 48 hours rather than four hours for acknowledgement that their electronic returns were received, said Terry Lutes, deputy associate chief information officer at the IRS.

Among the good news reported by IRS officials, the number of electronic returns submitted with electronic signatures was up this year by 10 million. But IRS officials would still like to learn how to get 8 million e-filers who submitted paper signatures to switch to electronic signatures. For the IRS, the biggest expense associated with e-filing is processing paper signatures, Lutes said.

A 33 percent increase this season in the number of taxpayers using the Web to check their refund status rather than calling the IRS was also good news, Lutes said.

A higher number of corporate and tax-exempt filers than expected filed 1120 and 990 forms online, the first year those forms were accepted electronically. Again, good news for the IRS, which has not given up on its goal of having 80 percent of taxpayers filing electronically by 2007, Lutes said.