State wants Phoenix man to return money after error

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PHOENIX -- A north Phoenix man says the state of Arizona sent him several hundred dollars, which he thought was a refund, but nearly a year later the state is demanding the money back.

So he contacted 3 On Your Side.

This is a weird one involving a check for $740.

Now, when Charles Kruezer received that check, he thought it was maybe for an overpayment in his taxes or possibly some kind of stimulus check, so he cashed it and used it.

But now, the state wants that money back and even though the state issued it by mistake, they want Kruezer to pay interest and a penalty on that money.

"I get this tax refund, I'm like oh good, bonus!" Charles Kruezer said.

Kruezer was ecstatic when he received some unexpected money from the Arizona Department of Revenue back in 2007.

Now, he wasn't quite sure what the $740 check was for, but nonetheless he was happy to get it.

"I was under the impression that it was some sort of economic stimulus package or something like that," he said.

Whatever it was for, Kruezer says the unexpected surprise helped him pay some bills and also take a family vacation.

And after the money was gone he didn't think much of it until a year later, that is, when he received a letter from the Department of Revenue, saying they wanted the money back!

"Not only did they make a mistake and send me this money, which was about $740, but then they wanted to charge me a penalty," Kruezer said.

Yep, the state wanted the money back and also wanted Kruezer to pay interest and penalties.

How much would he have to return for the state's mistake?

"An interest on top of it, so the total would be close to $900," Kruezer said. "I just couldn't believe it. I thought this is ridiculous!"

Kruezer called the Department of Revenue to find out what was going on, but he said he didn't get much help.

"I called the state and the first person I talked to there said, 'Yeah, well, this is what happened, we don't know why we sent you the check," Kruezer said.

Well, that didn't sit well with Kruezer so he contacted 3 On Your Side.

"We made a mistake and we're going to penalize you for it and not only that, the money, the $740, I had to pay taxes on that as income!" Kruezer said.

3 On Your Side contacted the Arizona Department of Revenue, which looked into the matter for us.

Kruezer says they should investigate because their mistake couldn't come at a worse time. After all, we just got through the holidays.

The state tells 3 On Your Side that giving Kruezer that money was their mistake and that money should have gone to someone else.

But after our involvement, the Revenue Department is removing that $200 penalty and interest charge and they are putting Kruezer on a payment plan so he can pay back the money gradually.