WALNUT CREEK, Calif. (KGO) — A mishap involving a COVID-era business perk nearly shut down a popular East Bay bakery. And for more than a month, the owner was left wondering: where did all my money go? ABC7 News 7 On Your Side’s Stephanie Sierra and our team stepped in to get answers — and get their money back.
$212,853 is a significant amount of dough for any small business. And in this case, we were told that it was all left in limbo over a nine-digit number with the IRS.
Sarah Torres is the proud owner of A Sweet Affair Bakery in Walnut Creek. The charming family-owned business is a neighborhood staple, serving up a decadent slew of sweets, savory sandwiches and custom delights for the past four decades. But she nearly lost it all — over a clerical error involving a business ID number.
MORE: Bank of America refuses to cash $900 cashier’s check from 1988
“It was just a nightmare,” Torres said. “I was crying to them…’please, this is a business account… I have 20 employees that I need to pay!”
Torres tried to deposit two Employee Retention Credit checks from the U.S. Treasury. It’s a pandemic-era federal benefit offered to businesses that retained employees that it otherwise couldn’t afford to keep.
The six-figure checks became a source of life support as the family-owned bakery did not receive any federal Paycheck Protection Program loans.
“It’s money we’ve been waiting for years for, and we desperately need,” Torres said.
She deposited the checks at the local Bank of America branch in Walnut Creek. But, at the time of deposit, she says a hold was placed on the checks. Two weeks later, her entire business account was frozen — so she had no access to any funds in her account for more than a month.
“We had to take out money from my kid’s college account… borrowed money from family members,” said Torres, adding she had payroll two days after this all happened. “So it’s been a lot of stress! And I don’t really know WHY!”
Here’s the odd part. Torres says she contacted the IRS and was told there were no flags on the account and that the agency verified the cashed checks with Bank of America.
MORE: California man deposits $33K check in BofA account, never sees it again as branch closes
“OK, I was so confused — like someone’s stealing our money? What’s going on?” she asked.
“How many times did you reach out to Bank of America?” asked 7 On Your Side’s Stephanie Sierra.
“Oh, hundreds!” Torres said. “At one point, they hung up on me… Told me to stop calling.”
“I also sent several emails, never got responses. And I mailed documents, overnighted with signature and never got a response from those either…” she said.
After many failed attempts, Torres says she finally got a hold of a banking representative who told her the funds would be released within seven to ten business days. But that never happened. Instead, she says the bank kept pushing back the date her business account would close. In the meantime, she had no access to her money — and was forced to consider shutting down the bakery or refinancing her home.
That’s when she called 7 On Your Side.
“I hung up the phone with 7 On Your Side at 11:20 a.m. on Friday. At 12:36 p.m., Bank of America called me. I had had no contact with them at all. They hadn’t reached out. ‘Oh, hi. We’re working on your case.’ And I’m like, okay….how fast that was,” Torres said.
Turns out all the drama was tied to a nine-digit number.
The Sweet Affair Bakery’s tax employer identification number (EIN) was changed last year, and the current one did not appear to be updated with the IRS. Bank of America says that’s why the checks were unable to be deposited.
Bank of America sent a statement to 7 On Your Side, saying: “Due to a discrepancy in tax identification numbers following a change in ownership of the business, the Treasury Department reported to us that these deposited funds might be fraudulent. Our subsequent investigation revealed additional information, and we determined there was no fraud. We are working with the Treasury Department and the client to complete the transactions.“
MORE: San Francisco man loses half his savings in bank transfer scam
However, according to tax experts — Bank of America should’ve been able to cash the check regardless of the new EIN number.
“Since the bakery was using the same bank, the bank should’ve been able to identify the old EIN alongside the new EIN on that account and not treat it like it’s fraudulent,” said Chris Housch, with Housch Tax Law. “And they should be able to honor that check.”
Housch explains the IRS is not supposed to issue checks from one account number to another, because it’s not considered “the property” of the second account number.
“The bank officer should be able to look at the paperwork and recognize that,” Housch said.
An important warning for any business.
Especially one that’s so delicious — it has its own warning label cautioning customers: “Once you visit, you may become addicted!”
That’s the case for Torres. And the icing on her cake? She finally gets her money back.
“I’m so thankful that you guys are helping us!” she said. “As a small business, we don’t have the resources to hire big-time lawyers or fight a company like Bank of America.”
Take a look at more stories and videos by 7 On Your Side.
7OYS’s consumer hotline is a free consumer mediation service for those in the San Francisco Bay Area. We assist individuals with consumer-related issues; we cannot assist on cases between businesses, or cases involving family law, criminal matters, landlord/tenant disputes, labor issues, or medical issues. Please review our FAQ here. As a part of our process in assisting you, it is necessary that we contact the company / agency you are writing about. If you do not wish us to contact them, please let us know right away, as it will affect our ability to work on your case. Due to the high volume of emails we receive, please allow 3-5 business days for a response.
Copyright © 2025 KGO-TV. All Rights Reserved.
(Except for the headline, this story has not been edited by PostX News and is published from a syndicated feed.)
