Update: After weeks of back and forth with Ally customer service, it turns out that Ally mistakenly reported to the IRS that my mother did not furnish her taxpayer identification number (TIN) so they slapped the 28% backup withholding on her interest earnings. This has been corrected. But honestly a lot of this could have been avoided if they would have been better at communicating - especially for an online bank.
This is a public service announcement (PSA). My mother brought this to my attention earlier today but I actually didn't believe her until I saw it for myself. If you are an Ally bank customer, it may be worthwhile to check your accounts. There is a chance that Ally is miscalculating your account balance. At least in my mother's case, Ally bank has been consistently under-calculating her balance. Let me illustrate.
Here is the transaction history for her savings account since January 2016:
Doesn't look too interesting right? Let me make it easier to see.
Ally bank has been consistently under-calculating my mother's account balance. As much as I would love to give them the benefit of the doubt and chalk it up to some kind of computer glitch, it appears the glitch never manages to over-calculate her balance in any situation. Over the period of 7 months, the total missing balance added up to $185.93. So if you are an Ally bank customer, make sure to check your accounts! I will be checking mine.