Dan Coyne couldn’t believe the notice he got in the mail Monday. The Internal Revenue Service was seizing his Permanent Fund Dividend because of back taxes he supposedly owed.
The alleged debt: 4 cents.
“I thought it was a practical joke that one of my friends was playing,” said Coyne, owner of Sourdough Sporting Goods in Wasilla.
But the notice looked official enough, and soon Coyne got mad. The government was going to tie up his dividend, estimated at $1,300 for every Alaskan this year, because he owed the equivalent of an eighth of a postage stamp?
“Can you imagine how much money this costs the taxpayers?” he asked.
He tried to call the IRS, but couldn’t get past the recordings and the hold music. He called the state Department of Revenue. He called his congressman.
“I was up in arms,” he said. The tax service never told him he owed this 4 cents. Even if the IRS was just going to take 4 cents out of his check, he figured it would likely take months for him to get the refund.
It turns out it was all a mistake, said IRS spokeswoman Pamela Craft. Coyne was one of about 800 Alaskans who received erroneous notices saying the IRS was putting its hooks in their dividends because they owed tiny amounts on their taxes.
“We’re extremely sorry,” Craft said.
The technical glitch was traced to an IRS computer in Ogden, Utah. Craft said the IRS doesn’t normally levy Permanent Fund checks for amounts less than $25. In some cases, the pennies weren’t owed in the first place, she said.
Coyne said he figured the tax service would blame it on a computer-generated mistake. But what about the bureaucrat who signed his notice, this Doris Marshall? “She should lose her job,” he said.
Actually, the signature was computer-generated, too, Craft said.
Craft apologized profusely. The IRS won’t touch the dividend checks of the 800 people who received the notice by mistake, she said.
“Anyone who has a concern can give us a call,” she said cheerily. She referred to a toll-free number and special extension the IRS set up for Alaskans who received the notices.
Coyne said he called that number and the special extension. He said he was on hold for an hour, then was cut off. When he called back, he got a recording saying there was no one to take his call. The recording directed him to another number. He called the second number and a machine gave him six options, none of which applied to his situation. Then he was cut off again.
“Oh my,” Craft said, when told of Coyne’s experience.
Wesley Bannon, a potato farmer from Sutton, had slightly better telephone luck. Monday, he and his wife received erroneous levy notices claiming they owed the government 7 cents. After 20 minutes on telephone hold, Bannon finally reached an IRS representative.
“She wanted to argue with me that it wasn’t 7 cents,” Bannon said.
Surely, the representative told him, if the IRS was levying his check, he must owe more.