Tuesday, July 19, 2011

What that IRS form with Payer 38-1798424 really means (Jan. 12, 2008)

[2011 update: This is another post I am porting more for completeness than anything else. When I wrote it, I had an incorrect assumption, but the error was confirmed by a call to Citizens Bank, so they were as wrong as I was. The take-away here: Don't believe even confirmed information. You have to get the correct information.]

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Current mood: enlightened

[Pre-Script: This blog now shows up in Google searches using the text "38-1798424". If that is how you ended up here, and even if you did not, please read the last comment at the end of this blog. Citizens Bank is not at fault here. That said, I will leave the original post untouched, though I have updated the title and "mood".]

"Not Your Typical Bank" is the slogan of Citizens Bank, a large chain of retail banks serving the eastern U.S., and noted here in the Pittsburgh PA area for having bought the retail business of century-old Mellon Bank a few years ago.

Today's snail-mail brought an I.R.S. notice. At least it sure looked like an I.R.S. notice. It was printed on I.R.S. letterhead (even if it was clearly computer generated on thin paper), had an I.R.S. return address, and paid for with "Presorted First-Class Mail, Postage and Fees Paid, IRS, Permit No. G-48". Sure sounded like our taxpayer-fed I.R.S. to me!

Inside was a Form 1099, a simple statement from the I.R.S., not my bank, that "Recipient" (with my Social Security number) had been credited with [dollar amount] of interest in calendar year 2007, by "Payer's Federal Identification Number" of 38-1798424.

Say what? The amount sounded like the interest I might have earned on my paltry savings account, so I called their toll-free number, and yup, sure 'nuff, that's exactly what it was about, and who it was that had paid it.

OK, so why in tarnation is the I.R.S. sending this out? At the government's -- the taxpayers' -- cost? Cannot a privately run bank, who I alone am sending hundreds of dollars in interest each month on various loans, shell out the postage to send out routine Form 1099s, like in every previous year that I've gotten them?

No, not your typical bank at all. This one gets the taxpayer to pay for sending out its own private mail.

Am I the only one who sees something wrong here?

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From the 2008 blog post comments:

Kathy I find your article on this quite interesting. I received one of these as well with my name, social security number and the same exact Payers Federal Identification number that was on yours.

What is odd is, if this is from Citizens Bank, I have never had an account with Citizens Bank ever! So what's up with this? I called the IRS regarding this notice to ask what this was about and I couldn't get a straight answer. They never told me it was Citizens Bank. I only figured that out when I saw your blog and the Payer's Federal ID number was the same.

Stuart Strickland Turns out what this is is indeed IRS-related, but not what I thought. Citizens Bank had nothing to do with it.

Remember last income tax season when many of us asked for a refund of excise taxes on telephone charges over the previous couple of years? The money that we got to deduct is considered by the IRS to be income.

More info here: http://www.insideindianabusiness.com/contributors.asp?ID=1107

1 comment:

Heyzeus Christos said...

I received the same IRS notice this January 2018 for tax year 2017 with my employer account number on the notice. I do not have any accounts with Citizens bank, nor loans nor any other accounts I can reference to Citizens Bank through my employer number.
Seems like a scam, as a way for citizens bank to send possibly millions of these notices to the IRS claiming small interest paid, to reduce their tax liability on profits. Banks are so ethical, just remember what Wells Fargo had been up to recently with false accounts n such.
I call total bs on this and the IRS for not giving proper notice of what the so called
"Interest Paid" is about.