LIVERMORE, Calif. (KGO) — A $30,000 mistake. That could happen to any of us. A Bay Area couple accidentally overpaid the Internal Revenue Service, but that’s only half the problem. As 7 On Your Side explains, both the couple and the federal agency appear to be at fault.
“If I owed $33,000, I’d go to jail!” said Joy Hays, frantically looking at IRS paperwork.
She and her husband Kenneth are struggling to comprehend the mess they’re in with the IRS. The Livermore residents tried to pay their estimated 2025 taxes due next year, early. According to their estimate, the total due for the year is $3,360.
“Not $33,000!” Joy explained, as if a firework went off in her house.
As her expression will tell you, the $3,360 figure she owed did not make it on the check. At least, not in the right spot. Joy wrote the correct amount on the numerical value box, but accidentally wrote out “thirty-three thousand, three hundred and sixty dollars” on the “Pay to the order of” line.
Oops!
“It was a bad day!” she said.
A bad day that turned into a bad month. Unfortunately, the IRS did not detect the discrepancy and eventually cashed the check, but the bank tried to withdraw the incorrect amount — and it bounced. Not once… but twice.
“I didn’t have $33,000 …” she said. “I would have bought a car!”
Chase Bank calls the couple to ask about the situation. Kenneth says he was told the bank only honors the amount that’s written out on the line, not in the numerical value box.
“They said the IRS will get in touch with us…” said Hays.
Well, that never happened. Instead, Kenneth says the IRS issued a $661 penalty, claiming they “underpaid or paid late.”
But tax experts say it could also be from the bounced check.
“I just figured it was impossible… I mean you’d think someone would look at the check and realize that it was wrong…” Kenneth said.
One would hope that would be the case. Joy and Kenneth tried calling the IRS for weeks to get this sorted, but got nowhere. In fact, they say the closest they got to a conversation was listening to the operator for six hours only to be disconnected.
“The IRS — they need more people!!” Joy said. “If they want money that bad, they better get more people.”
“Is it all AI??” Kenneth asked.
Well, according to tax attorney Chris Housh, the short answer is, “a human has probably not looked at what the actual situation is.”
Housh explains while the IRS is overwhelmed after losing a quarter of their staff in the midst of federal cuts, the Hays’ predicament should’ve been avoided.
“Unfortunately the payment processing unit and the tax return processing unit are two different places… so the check got separated from all the paperwork… nobody has double-checked the two items together,” he said.
“Do you see this often?” asked 7 On Your Side’s Stephanie Sierra.
“Often enough,” said Housh.
Housh says the IRS has call-in periods based on where you live. He recommends calling in at the end of the day when other parts of the country are blocked off. If that doesn’t work, he suggests going in person to the Oakland IRS field office or another IRS office to make your case. Or as a last resort, even write a letter.
“But the letter unit is overwhelmed and understaffed as well,” he said.
And Housh adds it’s only going to get worse, as provisions in President Trump’s “Big Beautiful Bill” will require the IRS to do even more case work with fewer people.
“So I’m expecting more snafus!” Housh said.
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Not what Joy wants to hear.
“A bad day is right!” she said. “If I owed $33,000 – I’d go to jail!”
Well, she won’t have to worry about that, the U.S. Department of Treasury got rid of debt jail back in the 1700s.
But the two of them are anxiously awaiting an answer from the agency. And in the meantime, may be seeking counseling.
“We argue so much about it, we almost got a divorce!” Kenneth said.
Take a look at more stories and videos by 7 On Your Side.
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