Man’s State Tax Refund Check Bounces

Leonard Rosenthal didn’t know what to think when he deposited his state tax refund check in the bank and it came back marked “Insufficient Funds.”

To top it off, Rosenthal’s bank charged him $5 because the state’s check bounced.

“I laughed and said ‘What the heck is happening to our state government?’ ” said Rosenthal, who lives in Camarillo’s Leisure Village, a gated retirement community.

After Rosenthal got a good chuckle out of it, he called his accountant to figure out how to get the $120 the state owed him, as well as the $5 Coast Federal Bank took out of his account.

“I’ve never seen anything like this,” said accountant Charles Greenberg of Newport Beach. “I’ve been in business 45 years, and this is a first. I just couldn’t imagine them not paying the refund.”

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Greenberg advised Rosenthal to call the State Franchise Tax Board and tell it the whole story.

“They told me to send back the check and the bank statement showing $5 had been taken out of my account,” Rosenthal said. “They say they’ll reissue another check and cover the bank charge. I think they’ll make good.”

Rosenthal mailed the rejected check back to the state Tuesday and expects he will receive a valid one within a couple of weeks.

The state had problems one year when it didn’t have the budget worked out and had to issue warrants that people couldn’t cash until a certain date, Greenberg said.

“But this is completely different,” Greenberg said. “Nobody but the state can get away with this.”

Employees at the State Franchise Tax Board seem as befuddled by this as Rosenthal, his accountant and the county tax collector.

“No one has ever heard of this happening--never, ever,” said spokeswoman Denise Quade, after checking with various departments as to why, or even how, a state refund check could bounce.

“We suspect it was a bank error and it went to the wrong account,” Quade said. “These monies are paid out of a huge account the state has, and we don’t have any money problems right now.”

Quade suggested contacting the state controller’s office--because, after all, it issues the refund checks.

“Are we sure it’s not on the bank’s end and that it’s on our end?” asked Byron Tucker, spokesman for the state controller’s office. “I’m more inclined to believe that something went wrong on the bank side of it and that we have the funds available.”

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But a Coast Federal Bank official said this isn’t the first time this has happened with state checks.

“We encourage the customer to redeposit the check and that usually takes care of it,” said David Porges, a vice president at the bank’s Los Angeles headquarters.

After all of the hassle, what will Rosenthal do with his refund when he finally receives it?

“I’m going to put it back in the bank,” Rosenthal said.

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FYI

Anyone experiencing problems with their state refund check can call 1-800-338-0505 to reach the State Franchise Tax Board.