Saturday, January 19, 2013

Bank Error!


Yesterday I received a Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRA's, Insurance Contract, etc. from the local bank where I have my IRA funds stashed.  

Last year I reached the grand old age of 70 1/2 and am now required to take a minimum IRA distribution so Uncle Sam can suck some more taxes out of the meager funds that I have left in my IRA after the stock market collapsed in 2000.

Earlier this year I was notified by my bank that I was required to take out $1,765.52, the required minimum distribution.  Since I don't want to pay a knee bending penalty tax, I authorized my bank to transfer said amount to my checking account with their bank.
Me waiting to see the bank manager this morning - not happy

Yesterday I receive my copy of the 1099-R 


Distribution form notifying me that my bank will notify the IRS (there it is, that three letter acronym to strike fear in the heart of any red-blooded American) that the distributed to me $3,531.04.  SAY WHAT?  I got over $3,000?  Where?  Did I miss something?

So I check my records.  Uh huh, I immediately notice that $3,531.04 is TWICE $1,765.42. Could it be?  Could this be a BANK ERROR?  




Well folks, we all know we don't want to confuse the IRS, especially when my bank is reporting to the IRS more money distributed to me than I ACTUALLY GOT which means I have to pay MORE TAXES on what little funds that Wall Street and the other government (Federal, State and local) haven't taxed me for yet.  You'all know folks, this is a very touchy area.  First of all I don't want to get on that Catch-22 treadmill with the IRS and I DEFINITELY don't want to pay more in taxes than I have too. Even though I didn't support that master tax dodger Mitt Romney this year for president, I don't want nor can I afford to pay more in taxes than I am obligated to pay.  I don't have the luxury of having an offshore Cayman Islands bank account but I did have the "luxury" of stashing some of my hard earned funds away in an IRA during my salad years of earning income while I WORKED FOR A BANK!

Yes folks, I work for a hotel not but for thirty-seven years I work for a bank.  In fact I worked for a total of four banks, the major part of my career with Girard Bank (now Mellon) in Philadelphia. 


Me with one of my operations staff  at Mellon Bank, Philadelphia 1982

I was a trust operations manager.  And you might ask "What is a trust operations manager?"  Well folks, it's basically a back office operations manager for the trust department as opposed to working as a front line teller or a bank president, neither of which I ever did.  I was the manager in charge of sending out remittance checks to trust beneficiaries, charging fees to those same accounts for sending out those checks and statements, and several other back office duties including preparing the very same 1099-R Distribution form that I received yesterday.  That's right folks, this is an area in which I know what I'm talking about.  

I know how these forms are prepared.  They are prepared by human beings.  Fallible human beings.  Me being one of them.  Oh yes, hard as it is to believe, I've made my share of errors.  And I know that if an error is made on one of these forms the bank has until January 31st to correct it before they transmit their tape to the IRS.  If the error is found and corrected after the end of the month of January, then the recipient has to deal with the IRS directly.  Folks, I really don't want to go there.  I like to make my dealings with the IRS as simple and above board as possible.  No Mitt Romney (yes, I'm going there again) with reams of paper work to confuse the IRS.  I only have a staff of one to prepare my tax returns, just little ole me and my Turbo Tax program.



So I go into the bank this morning, armed with my documentation and wait for the bank's CSR (customer service representative).  Wouldn't you know it he's busy with some young couple, taking forever.  Bill's out in the car in the cold waiting for me.  One of the teller's takes pity on me after seeing me sitting in the chair for about twenty minutes (about the time I took this picture at the top of this posting) and asked if she could help. I presented my paperwork to her.  She "pulled me up" on her computer screen.  And then.....nothing.  She just kept looking at her computer screen.  I tried to explain to her that the figures were doubled.  She told me "a person doesn't do this form, it is done automatically."  Uh huh.  Well, that's technically not true.  Maybe a machine prints out the 1099-R notice but little human fingers punch in the amount.  IT IS WRONG.

After about another fifteen minutes looking at her looking at her screen I could tell this wasn't going anywhere.  She was nice enough but this just WASN'T GOING ANYWHERE.

Okay, back to Square One. "Perhaps I should go back home and get my checkbook and the rest of my information and come back and see the manager?" I could see the relieved look on her face as I told her this.  

Back to my car, Bill chilled to the bone (I had the keys to the car).  Back home, into my safe, got my checkbook and more documentation and back to the bank before it closes today at 12 pm.  



Time to see the Maharaja manager himself, an Assistant Vice President.  Nice man.  I'm feeling better now.  I think a smile actually crossed my lower face.  He looked at my documentation, pulled up my account on his computer screen, looked at my information and rubbed his chin and murmured "Hmmmmmm."  I think I broke through The Wall.  

He agreed with me, it DID LOOK LIKE THERE WAS A BANK ERROR.  He said that they couldn't do anything today (which I knew, it is a Saturday after all) but that he would copy my documentation and submit it to their operations department for research (we're not home yet folks) and correction (?) He said if it was wrong they would send me a corrected notice.  I gently reminded him to make sure it was done by the end of the month before they submitted their information to the IRS.  He looked a little surprised that I knew this tidbit of information so to assuage his curiosity I told him that I used to prepare these forms.  

He smiled and nodded his head towards me and said "Mr. Tipton, we will take care of this on Monday."  Words that were music to my ears folks.

So, this whole operation took a chunk of about 2 1/2 hours out of my Saturday morning but I feel progress was made and I adverted a potential Big Time Stress with the IRS.  

Life in the fast lane folks, it is at times like this that I'm glad for all those years I worked at the bank.  

By the way, hotel front desk clerks don't put anything over on me either.  I got fourteen years experience in that field. I'm ready.


"Mr. Hampton Inn - Exton, PA"




14 comments:

  1. follow up with the bank on monday. they could be lying just to get rid of you.

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    Replies
    1. Anne Marie,

      I think they will correct the problem. If they don't, well, you don't want to get Ron on the warpath.

      Ron

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  2. Hey Ron: I gave my blog a new look. Take a peek when you get a chance.

    The software guy in me is curious. I'm guessing that bank data centers run large IBM mainframes and/or large clusters of Unix/Linux systems to perform their operations. Is the software for banking operations custom made for each bank, or are there some industry standard packages used? How were accounts maintained pre-computer? Was it all done with ledgers? I hope this last one isn't a dumb question. I'm just curious about the banking industry.

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    Replies
    1. Sean,

      I'll check your blog out. To answer your question, the last bank where I worked was a small bank. We literally did our 1099-R's manually. I suspect this bank does the same thing.

      Ron

      Delete
    2. Gotcha. I'm just curious about how things work. I have visions of our funds literally living in giant databases and transaction processing systems.

      Delete
    3. Sean,

      Our funds go to that giant gambling casino called Wall Street. Occasionally they lose a bet and call on the government to bail them out with a stimulus program. Either way we get it in the ass.

      Ron

      Delete
  3. Ron,

    On Monday (excuse me, Monday is a bank holiday . . .) On Tuesday, when the bank admits their mistake, send them a bill for 2.5 hours of a bank manager's current salary. That should make them sit up and take notice.

    David

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    Replies
    1. David,

      I did forget that Monday was a bank holiday (Martin Luther King Day). I should know that, that's one of the reasons I went to work for a bank, all the holidays.

      Ron

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  4. If they do anything about it on Monday, it will be a miracle, it's a Federal Holiday (known as a BANK Holiday in jolly olde England, for obvious reasons).

    But I do hope they get it worked out.
    Peace <3
    Jay

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    Replies
    1. Jay,

      I forgot all about Monday being a holiday. As long as they get the problem fixed before they transmit the data to the IRS at the end of the month. I hope they haven't already done it.

      Ron

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  5. Best of luck, Ron. As a fellow retiree, I think we should get medals for decades of contributing and somehow settling incomes on ourselves in these strange economic times. Banks and IRS should reach out with a bit more kindness. Heck, everybody should.

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    Replies
    1. George,

      I don't know what old people who have decreased mental facilities do when confronted with problems with the banks and IRS. I feel for them. You really have to have your wits about you when dealing with money matters these days. And isn't it strange that the errors always seem to be in their favor?

      Ron

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  6. Ron,

    Dealing with the IRS was a gift I received when WTC booted me into early retirement. Too complicated to explain here. Ah, fun times!

    At WTC almost everything was processed by the computer systems, including the 1099s. This fact is one of the reasons I call the huge overdraft fees phony-baloney. The human error may have crepe in when someone forgot to check off some field when you withdrew early.

    Lar

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    Replies
    1. Lar,

      I didn't withdraw early, I had to take the distribution. I'm over 70 1/2 and every year I have to take a minimum distribution. This was last year's minimum distribution that I took. Somebody screwed up someplace or maybe all their 1099's are wrong because they sent me one that is exactly TWICE the distribution that I got. They don't have to transit that information to the IRS until after January 31st. I just hope they didn't screw that up either and transmit it early.

      Ron

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