The banks are robbing us blind....literally.

Two days ago, I received an overdraft notice from Bank of America to the effect that my account had fallen to zero. 

Approximately one-third of my life's savings had just disappeared.

Normally, if something like this were to happen to you, you would assume someone had made a mistake...but I am currently engaged in a battle with the Internal Revenue Service, which thinks I owe the IRS  for the taxes on the $3 million I made in 2008 and 2009.

The problem, of course, is that I didn't make $3 million.  In fact, I lost money in those years.

Whenever you sell shares of stock, your broker forwards a 1099 to the IRS reporting the transaction.  As a day trader, I bought and sold more than $3 million worth of shares.  (Don't do this at home, by the way...and never borrow against shares you own to buy more of the same shares.)

The IRS  kept sending me notices, and I kept sending back explanations of why I wasn't  submitting tax returns: I had NO income during those years.

You don't have to file a tax return if you don't owe the IRS any money, but try telling the IRS that.   They even send out a form asking you explain why you don't think you need to file a tax return which makes no sense if indeed you are required to file a return regardless of income.

Finally, a few weeks ago, we found a post-it note stuck to our front door with a note telling us to call John Doe at the Internal Revenue Service.

I am calling him John Doe because I couldn't actually read the name scribbled on the post-it note.

When I called him, I was pretty blunt about it, pointing out that the law doesn't require you to file if you owe no taxes and want no funds returned to you.

I know this because I have been through this twice before....winning both cases.

I asked him where he got the idea that I owed the IRS something like $600,000, and that's when he told me about the 1099s my broker had submitted to them.

Unfortunately, for some strange reason, the broker didn't send me the 1099s.

I asked him to send me a print out.

It arrived several days later in a manila envelope with an illegible return address scribbled on it....and without the name of the IRS agent I'm calling John Doe.

What does this have to do with the Bank of America?

Keep reading.

I misplaced the documents the IRS agent sent me and by the time I found them again, it was  the New Year's Eve weekend, most of which I spent working on the returns for 2008, 2009, and 2010, after I finally found the missing documents.

And that's where the fun really began.

I used a program called FileLate for 2008, only to discover that they wanted an additional $40  on top of the initial $36 to provide the documents in less than 48 hours.

So, I used TaxAct for 2009 ($12.95), which turned out to be a better choice because they had a better user interface that made it easier to enter multiple transactions. ...until I discovered that  TaxAct simply wouldn't print out the returns.

I finally figured out that the problem involved the version of Adobe Acrobat that  I use.

The mortgage origination software I use at work requires an older version of Adobe Acrobat than TaxAct wants....so I had to reinstall the software on another computer to print out the 2009 return.

By now, of course, it was the first  Tuesday of the New Year....and the deadline for sending in my delinquent tax returns had come and gone.

I tried, of course, to reach the IRS agent....John  Doe.

It turns out, of course, that there are no IRS agents named John Doe.   Well, there probably is an IRS agent named John Doe somewhere in the United States, but that doesn't matter because you can't find anyone at the IRS if you don't already know their name or phone number.

Okay, that's not surprising.  They are, after all, the federal government.

The number I had for John Doe in my smart phone turned out to be for a farmer in Nebraska, someone I had contacted on a business matter.   Of course, the name on the contact list wasn't John Doe.  It was IRS IRS because I had already forgotten John Doe's real name.

I have no idea how the Nebraska farmer's phone number ended up connected to IRS IRS, but that not really germane to this story.

What is germane is that it turns out that it is absolutely impossible to reach anyone at the IRS if you don't know their names.

That's not as stupid as it sounds. 

If you want to find a specific person  at a bank for example, you give them your name and account number and they can pull up the names of everyone you have done business with at the bank....or so they would have you think.

Now, finally, we can get back to the Bank of America story.

So, when I got an email telling me that my Bank of America account was overdrawn because I had a balance of zero dollars in my account....my first thought, of course, was that the IRS had levied my account....and, if they had, it wouldn't have been the first time.

I went through the same scenario with them several years ago, with them insisting that I had to file tax returns for years in which I had no income.

The IRS levies accounts as a means of forcing  tax payers to come to heel when they call....and it works. 

There's nothing more terrifying than to hear that the account where you keep your liquid assets has been cleaned out by parties  unknown.

The plot thickened when I tried to use the online banking system to look at the check that was drawn on the account....because there wasn't any.

Now, when the IRS levies your accounts....they want you know about it. 

The absence of any paper documents suggested another, more sinister possibility:

When my parents were alive, they gave me a Bank of America credit card to use for household expenses.  When my mother passed away,  Bank of America informed me that I was responsible for the total outstanding debt.

I didn't agree and so, when they cancelled the credit card, I cancelled the monthly payments.

You can't have your cake and eat it too....and they know it.  Either I was entitled to that line of credit, and therefore obligated on the debt, or I wasn't entitled to that line of credit and therefore - in my eyes - I wasn't obligated on the debt.

This issue remains in doubt....but that doesn't mean the thought didn't cross my mind that Bank of America might have swept my account to cover the outstanding balance on the credit card.

I tried for several hours to get this matter resolved through their online banking department., not because I thought they would be able to help but only because it has become virtually impossible to reach anyone at Bank of America by telephone. 

Try it some time.  Really.

It takes several minutes to struggle through the automated attendant prompts before you reach an actual human being....who then puts you on hold for three minutes, at which point their system hangs up on you and you have to start all over again.

 Now thoroughly panicked, I tried to access my credit union account to see if that account had been swept too.

No such luck. 

I couldn't get into my account through the credit union's website because I couldn't remember the user name and therefore couldn't retrieve the password.  I drove over to the nearest branch, but I couldn't get into the ATM because I couldn't remember the pin.

By now you must think that I'm a real idiot, unless you had already formed that opinion previously, but the fact was that I deliberately did keep those numbers because the money in the credit union is my cold storage money....the money I have put aside for a very rainy day, and I didn't want to be dipping into that account for anything less than a real disaster.

I went back home, downloaded 2008, printed 2009, and did a 1040  EZ  for 2010 on the IRS web site, which is free of charge and works just fine as long as you actually know how to fill out a tax return without the software.

The next morning, I went to the credit union, where I found my funds intact, drew out some emergency money, and went  to Bank of America to beard the lion in it's den.

This is where I found out that it was neither the IRS nor Bank of America.

Someone , it seems, walked into a Bank of America branch in Texas and drew out all of the funds in my checking account in  a Cashier's Check down to the last penny.

This is where it gets even curiouser. 

I had recently done a business transaction with someone down in Texas, and then decided to rescind the deal.  It took them a week to return the funds.....and then, two days later, someone walks into a Bank in Texas, and empties my checking account.

The Bank, of course, knew immediately that something was wrong because they can read the code on the entry and knew that bank check had been issued when the owner of the account had been in another state at the time.

As a matter of fact, they caught the error before the person in question had left the bank, so the cashier's check never actually left the bank but, since it was a cashier's check, they couldn't just reverse the process.

Or so they say.

Bank of America won't tell me who raided my account.  I have my suspicions, but I can't name names because the person in question is very litigious and is also a lot bigger than I am.   He's also a pretty well known person - a real estate investment guru - so I don't want to cast aspersions upon his character and, besides, he probably wasn't even involved in the scam.   When the cat's away the mice do play.

There are unanswered questions here.

How did someone walk into a Bank of America branch in Texas, and get the Bank to issue a cashier's check to someone who didn't have any identification to prove that he was me.

Here's how it might have happened:

When I bought that real estate seminar, I used my ATM card.  I thought I was being smart, because I told them to run the transaction as a credit card deal, not a debit card deal...but they still had all of the information encoded on the card.  They also had a paper application with all of my personal information on it.....everything they needed to spoof my debit card.

And that's the easy part.  Now that most credit cards have the pictures of their owners on them,  sales clerks  have become sloppy.  They glance at you, they glance at the picture on the card, and run the transaction but, unless they actually know you, they have no way of knowing whether or not you're actually you.  As long as the picture matches the person in front of them, they are going run that transaction.  After all, they're there to make sales, not reject them.

Bank tellers aren't that sloppy yet.  They still want to see a driver's license, but driver's licenses aren't that hard to spoof. 

Tellers in Texas know exactly what a Texas driver's license looks like, but they are far less certain about what a Florida license looks like, so it's not all that hard for them to dummy up a reasonable facsimile of a Florida license.

But how did they get my pin number?

I entered it into their card reader.

And how did they get a specimen of my signature?

I signed the application.  Twice.  (There were actually two applications.)

But how in the name of everything sacred did they know - to the penny - how much money I had in my account.

They ASKED. 

 Let this be a warning to you:  Whenever you sign a document that is going to leave your possession, sign it differently from how you sign checks.   And never, ever let anyone run your credit or debit card through one of those mobile card readers.  It's not that there's anything intrinsically wrong with the card readers themselves....but there are specially designed card readers that look like a regular card reader, but are actually designed to steal your information.

Really.

And this is far more prevalent than the banking industry wants to admit.  I know this because I am in the banking industry these days.

The fact of the matter is that losses from credit  card fraud is costing the US banks more than  $2.5 billion annually that we know about.  The actual number could be 10 to 20 times larger.  

And that's what I think happened to me.

Now I really wish I could tell you the name of the guy whose associates might have been involved in this scheme, but that would be libel, because I have no proof.....only an unusual coincidence.

There are postscripts to this story....it's not over yet.

I sent the tax returns to the IRS, but I have no doubt that the IRS is going to reject the returns, or demand documentation....and the only documentation I have is a spreadsheet that my former broker sent me.  The IRS is going to demand receipts, and I don't have any.

What I do have is a ledger that shows how much I invested and how much I got back when I closed the account...but that doesn't seem to interest them.

The moral to this story is that our information based society is spinning out of control.

Stock brokers send out ridiculous 1099s despite the fact that the sale of a stock doesn't mean that a disbursement has been made to the customer.

The IRS doesn't understand how the stock market works.

TaxAct doesn't know how to maintain backwards compatibility  with older versions of Acrobat.

Adobe sends out a new version of its software every few weeks, and constantly badgers you to install the new one.

The mortgage software can't handle forward compatibility issues.

And Bank of America doesn't understand customer relations.

After the dust had settled, and my funds were back where they belonged, Bank of America issued a credit for the overdraft fee they had charged me....and then, a day later, they reinstated the overdraft fee for no reason I can discern, and absolutely refuses to discuss the matter with me.

As a matter of fact, their online chat manager hung up on me today, when I tried to get my $35 back.

And they wonder why the Occupiers want to dismantle the big banks.

 Who doesn't?