608C Dishonored Check Penalty Explained

My check (payment) was rejected by the bank. Now what do I do with IRS?

  • Sometimes, the taxpayer calls the IRS because he received the letter 608C, Dishonored Check Penalty Explained , stating that the bank did not pay the amount to the IRS and returned his check or other commercial payment document. The IRS does not forward to the bank for collection checks or other business payment documents. This forwarding is handled by the Bank Clearing. When a check or other commercial payment document is not paid, the Banking Clearing often forwards it to the bank and the notice is generated.
  • The IRS cannot forward your check or other commercial payment document for collection. You decide if you should wait to see if the Banking Clearing forwards it to the bank or must make an additional payment.

 

608C Dishonored Check Penalty Explained

If your check or other commercial payment document is forwarded to the bank and there are sufficient funds in your bank account to pay it, it will not be returned to the IRS ; therefore, you will not be charged interest and penalties not paid by check. However, if the payment is late, taxpayers could charged a penalty and interest for this item. The IRS will notify you if your account is due with some overdue debt.

 

How is the IRS fine calculated?

When a check or other commercial payment document that the IRS receives for paying taxes are not paid by the bank, the fine,  is usually equal to 2 percent of the amount of the check or other commercial payment document. However, if the amount of the check or other commercial paper payment is less than $ 1,250.00, the fine is a flat $ 25.00 or the amount of the check or other commercial paper payment, whichever is less. Therefore, if the amount of the check or other commercial payment document is $ 25.00 to $ 1,249.99, the fine is $ 25.00.

 

Request for reduction of fines or reduction of payment other commercial document

The IRS can reduce this penalty in certain circumstances. You can apply for reduced fine, reporting the reason why the payment was not accepted by the bank. This request must be in writing and should be done only after you have received notification that the fine has been levied.

 

Stop Payment on Check sent to IRS

Generally, this penalty is not taxed by checks or other business documents for which payment has been requested a stop payment order. If you have been fined, please send a copy of the request for suspension of payment together with the application for relief from the fine and send it to the address indicated in the notice.