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An overwhelming number of last minute US income tax filers obliterated Intuit's capacity to handle their tax returns, leading to a lot of frustration and worries about punitive IRS action. First, tax filers using Intuit's TurboTax products can exhale. The IRS is not going to penalize people whose filings did not hit their systems before April 17 became April 18.

"Intuit product users who were unable to file their returns through the company’s servers Tuesday should e-file as soon as possible," the IRS said in a statement. "The IRS will not apply late filing penalties to taxpayers who were affected by this problem."

Taxpayers who were unable to e-file their tax returns Tuesday using Intuit Inc. software products have until midnight on Thursday, April 19, to file their returns.

The drive to encourage Americans to electronically prepare and file their taxes proved too successful for Intuit. Thousands of taxpayers hitting the company’s servers at the same time were simply too much for them to handle.

Nick Carr blogged that Intuit needs to look to the clouds for a solution before next year's tax season hits. By clouds, he is referring to cloud computing, with processing distributed across a large number of computing resources:

To run its business with private, dedicated servers, Intuit needs to build its data centers with the capacity necessary to handle the extreme spike in traffic - the peak load - that comes on tax-filing day. The vast majority of that installed capacity will go unused most of the time....

The only way to do cloud computing efficiently is to share the cloud - to establish a broad, multitenant grid (or a number of them) that balances the loads of many different companies. Otherwise, it'll be one cloudburst after another, and a whole lot of underutilized capital assets.

It's one thing for an online form to blow up when submitting a catalog request, or even a purchase on a retailer's website. But to vainly watch the clock tick past midnight while Intuit's servers ineffectively churn without response has to be a pants-wetting, heart-thumping moment where all one can think of is a bunch of IRS agents speeding to the house with handcuffs and a one-way ticket to Guantanamo.