Keep Good Records and Put Up a Good Fight If You Know You're Right

It seems life becomes more complicated every day, especially when dealing with finances. To be honest, I'm not sure what I'd do if something happened to my husband and I had to take over the management of all our bills, investments, etc. Not that we have that much to invest, but if people our age haven't saved a little, they're likely to be in trouble eventually.

When the option first was presented many years ago for workers to buy IRA's, thus avoiding taxes on the amount of money put into them until they were cashed in, my husband elected to buy the maximum allowed every year he could scrape up the money. I also bought them during the time I worked, and the rest of the time, he was allowed to buy some in my name.

My husband has always been very cautious, and would never invest in stocks, choosing instead to stick with CD's, which pay less interest, but are FDIC insured. The problem with this is that he finds himself constantly searching for the best rate on CD's for the IRA money. That causes us to need to move the money from bank to bank almost every year, as the bank with the best interest rates this year probably won't be next year.

A while back we came upon a problem we had never anticipated. We had never made any withdrawals from the IRA money, but he had just reached the age where he is required to make regular withdrawals. So last year when we moved the money from a bank in the next state (50 miles away), he instructed the lady to withhold $5000, which was a little more than he was required to withdraw, and to send $750 to the IRS. The rest was to be transferred to a bank in a neighboring town, which was offering by far the best interest rates he could find.

This lady, I'll call her Jo (not her real name), is the one we have always dealt with, and one couldn't ask for a nicer person to do business with. She did as asked, and gave us papers showing what she had done.

This year when getting ready to start working on our taxes, my husband waited patiently for the form from the IRS showing that he had withdrawn the $5000 and that the bank had paid the $750 to IRS. When the form finally came, it showed that he had withdrawn only $4250 and that nothing had been paid to IRS.

He called the bank and Jo was not in. So he was forced to talk to another one who was supposed to be the one who handled such things. She adamantly refused to listen to my husband, and kept insisting that "somebody" had goofed, and $5000 had not been withdrawn at all. My husband told her that in that case, he would have withdrawn less than the required amount and would have to pay a penalty. So she said if he would mail her a check for $626.24, she would send it to the IRA. Feeling overwhelmed by that time, he finally agreed to do so, but kept insisting that he had withdrawn the $5000.

Shortly after sending the check, he received a "corrected" statement from IRS, which still showed a withdrawal of only $4250, but with $626.24 paid in taxes. It gave the impression that the tax money had come from the $4250, still showing he had not withdrawn the required amount.

So he spent more time digging through everything he could come up with, and in the process found two papers that provided proof positive that he had withdrawn $5000. If this sounds like he does not properly file his papers, that is not the case. It's just that there are so many of them. He also writes copious notes on such papers, in case he forgets some of the details later.

So we drove the 50 miles to the bank in order to talk to Jo. She saw immediately that we were right about it and that she had filled out the papers to prove it. She called the woman my husband had been forced to deal with before, told her we had the papers showing what was done, and she even pulled up onscreen the "paperwork" from what she had done a year before. At one point she said in exasperation, "Do you want me to fax these papers up to you?" Apparently the answer was no, as she didn't fax them.

It was a long half hour, during which Jo argued with the other person who just would not accept that she, herself, was wrong about it. Eventually, Jo went somewhere and brought back a cashier's check for $750.

I tried to say that now the form from the IRS would have to be redone, but by then everyone was so stressed no one would listen to me.

The next day, my husband again started on the taxes. It didn't take long for him to realize the "corrected" paperwork from the IRS could not be used and would still get him in trouble. So he had to call the bank again and talk to "the woman upstairs." I guess she realized she was in danger of getting in trouble, as she was very nice to him this time. But she said she isn't the one who deals with the IRS, and the elusive person who actually does it is off for the week. So it's more time lost waiting for those "corrected corrected" papers.

Now I don't know if there was an honest mistake made here, or if somebody in that bank is embezzling money, especially from old folks like us who they think aren't on the ball enough to know the difference. If that sounds like suspicious thinking on my part, I might point out that the local woman I respected above anyone else I knew, embezzled hundreds of thousands of dollars from a local bank, and wasn't caught till computers came into use, making it harder to hide such acts.

I'm just glad that my husband is so diligent in his bookkeeping, that he keeps all papers relating to transactions as long as they might be needed, and that he writes copious notes to himself to explain what has been done. This time it saved us $750. Next time it might be more.

Please learn from our experience, and if you think you're right about a deal such as this, don't give up and cave in to someone who thinks they know it all. You might be right and they might be wrong, and the money you save might be your own.