Taxpayers given unexpected break after IRS website glitch

SAN FRANCISCO (KGO) -- The IRS just gave taxpayers an unexpected break. The deadline for filing has been extended until tomorrow night at midnight after its computer system had a day-long breakdown.

At one point -- filers were advised to quote: "Come back on December 31, 9999."

ABC7 News Reporter David Louie spoke with one expert on what may have happened.

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Taxpayers take the midnight deadline seriously, knowing they will pay a penalty if money owed isn't paid on time.

But Uncle Sam was having computer problems on this mission critical day. The IRS' computers were unable to accept direct payments for most of the day.

That's not all. Tax preparers say the e-filing system wasn't working either. Nine out of 10 taxpayers e-file instead of submitting returns on paper.

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What does this glitch say about the IRS computers?

"Well, it says their system is really, really old and needs an overhaul," said Professor Caroline Chen, who teaches accounting and taxation at San Jose State. Previously, she spent 13 years as a senior tax attorney at the IRS.

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"It's Tax Day. And they can't accept e-filing or e-payments," said Chen. "That's the very essence of Tax Day."

The IRS had a similar problem two years ago. Before the filing deadline was extended, it appeared many would need to file the old-fashioned way.

"Tax preparers will need to print out the returns," Chen said. "Taxpayers themselves will need to print out returns from their TurboTax or whatever tax software they're using, sign them, and get them into the mail."

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H&R Block said it's handling its clients' returns differently. "While the IRS system is down, we are completing the returns, which will be sent as soon as the IRS system re-opens and will be considered filed on time," the company said.

So what will it cost to replace the IRS' antiquated computer system? By some estimates, it could be well over $1 billion.

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