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Can you summarize IRM 3.14.2.7.1.4.2?
Payments and Credits (01-01-2016) > Dishonored Payments and Bad Check Penalties (01-01-2023)
Short Summary
This document governs the penalties imposed on dishonored checks or other forms of payment that are returned unpaid by a financial institution. The penalties associated with dishonored payments are identified on the Master File and IDRS as TC 280 or TC 286. If a Dishonored Payment transaction and penalty are pending on the notice module, certain actions need to be taken, such as deleting any refund resulting from the dishonored/bad check, waiting for TC 841 to post if the refund was deleted, inputting CC STAUP for 6 cycles if a balance due remains, and updating the notice to include the Dishonored Payment Penalty. Additionally, a manual refund may be issued for large dollar refunds within the 45-day period if the taxpayer is still entitled to a refund despite the dishonored payment/bad check. For more information, refer to IRM 20.1.10.7.
Whom does it apply to?
Taxpayers who make payments to the IRS that are returned unpaid by a financial institution
What does it govern?
Dishonored Payments and Bad Check Penalties
What are exemptions?
No exemptions are mentioned.
What are the Penalties?
Penalties associated with dishonored payments are identified on the Master File and IDRS as TC 280 (manually computed and assessed penalty) or TC 286 (systemically computed and generated penalty).
Jurisdiction
U.S. Federal Government