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IRS.gov Website
Rev. date: 10/26/2018


Dishonored Payments

Tax Topic 206
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Responding to Taxpayer Inquiries:

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My check (payment) didn't clear. What now?
How is the penalty calculated?
When a check or other commercial payment instrument the IRS receives for payment of taxes doesn't clear the bank, a penalty of 2 percent of the amount of the check or other commercial payment instrument generally applies. However, if the amount of the check or other commercial payment instrument is less than $1,250, the penalty is $25 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 between $25 and $1,250, the penalty is $25.
Requesting Penalty Abatement
The IRS can abate (remove) this penalty in certain circumstances. You may request penalty abatement by explaining why the payment was dishonored. You must make this request in writing and should only do it after you've received the Letter 608C notifying you of a penalty assessment.
Stop Payments
A dishonored check penalty isn't assessed on checks or other payment instruments for which you placed a stop payment order. If you're assessed a penalty, please send a copy of the stop payment request along with your penalty relief request to the service center address listed on your Letter 608C.