IRS Demands $1.87

Since the tagline of this blog is "outside the bureaucracy looking in," I can't resist passing along this story from my colleague Kellie Lunney about her experience today as a taxpayer interacting with the IRS:

So, the IRS sends me this letter yesterday saying that I miscalculated my student loan interest deduction in 2007 and that I actually owe them $236 extra plus $1.87 in interest since April 15. Turns out that my return was accurate and they made some inexplicable mistake. So, I don’t owe the extra $236. But I do owe Uncle Sam the $1.87 interest.

In effect, I owe interest on a sum of money that I never owed the government in the first place.

I said to the IRS person on the phone, “You do realize this is crazy?” And she says, “Well, this is my job and let me tell you, I see all kinds of craziness every day.”