Rev. date: 01/01/2011
Responding to Taxpayer Inquiries:
My Check (Payment) did not Clear. What Now?- At times a taxpayer will call the Internal Revenue Service
because they received a Letter 608C, entitled,
Dishonored Check Penalty Explained, stating that their check or other commercial payment instrument
did not clear the bank. The Internal Revenue Service does not submit checks or
other commercial payment instruments a second time for payment. The
re-submission of a payment would be in the hands of the clearinghouse. When a
check or other commercial payment instrument is not paid, the clearinghouse
frequently resubmits it to the bank.
- We cannot ensure that the check or other commercial payment
instrument will be submitted a second time for payment. It is up to you to
determine whether to wait and see if the clearinghouse resubmits it to the bank,
or whether you should make an additional payment.
- If your check or other commercial payment instrument is resubmitted
and there are sufficient funds in your bank account to cover it, the check will
not be returned to the Internal Revenue Service, and therefore, you will not be
charged with the penalty and interest for an unpaid check. If the payment is
late, however, there may be penalty and interest for the late payment. We will
notify you if a balance becomes due on your account.
How is the Penalty Calculated?
When a check or other commercial payment instrument the IRS receives
for payment of taxes does not clear the bank, a penalty generally applies that
equals 2 percent of the amount of the check or other commercial payment
instrument. If, however, the amount of the check or other commercial payment
instrument is less than 1,250.00, the penalty is $25.00 or the amount of the
check or other commercial payment instrument, whichever is less. Thus, if the
amount of the check or other commercial payment instrument is from $25.00 to
$1,249.99, the penalty is $25.00.
Request Penalty or other commercial payment instrument Abatement
The Internal Revenue Service can abate this penalty in certain
circumstances. You may request penalty abatement by providing a reason why the
payment was dishonored. This request must be made in writing and should only be
done after you have received notification of a penalty assessment.
Stop Payments
Generally, this penalty is not assessed on checks or other payment
instruments for which a stop payment order has been requested. If a penalty is
assessed, please send a copy of the stop payment request along with your request
for penalty relief to the address on the notice.
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