The Inappropriateness of the Bad Checks Penalty

Authors

Douglas A. Kahn, University of Michigan Law SchoolFollow
Jeffrey H. KahnFollow

Document Type

Article

Publication Date

11-2017

Abstract

The Internal Revenue Code of 1986 provides many penalties for actions or failures to act on matters concerning the tax law. Section 6657 applies a penalty to a person who tenders an instrument to the IRS as a payment if the instrument is not duly paid. The penalty does not apply if the person tendered the instrument in good faith and with reasonable cause to believe that it would be duly paid. In this article, the authors argue that the penalty for sending a bad check to the IRS is excessive and that the reasonable cause exception should apply to any honest factual error.

Comments

Reprinted with the permission of Tax Analysts.

Recommended Citation

Kahn, Douglas A., co-author. "The Inappropriateness of the Bad Checks Penalty." Jeffrey H. Kahn, co-author. Tax Notes 157, no. 6 (2017): 835-9.