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Title 26 — Internal Revenue CodeRelease 119-73

§6657 Bad checks

Title 26 › Subtitle Subtitle F— - Procedure and Administration › Chapter CHAPTER 68— - ADDITIONS TO THE TAX, ADDITIONAL AMOUNTS, AND ASSESSABLE PENALTIES › Subchapter Subchapter A— - Additions to the Tax and Additional Amounts › Part PART I— - GENERAL PROVISIONS › § 6657

Last updated Apr 6, 2026|Official source

Summary

If a payment instrument (like a check or other usual payment) used to pay an amount owed under this title fails to clear, the person who sent it must pay a penalty after the Secretary gives notice and demands payment. The penalty is 2% of the instrument, except when the instrument is less than $1,250, in which case the penalty is $25 or the instrument amount, whichever is less. No penalty applies if the person acted in good faith and had reasonable cause to believe the payment would be honored.

Full Legal Text

Title 26, §6657

Internal Revenue Code — Source: USLM XML via OLRC

If any instrument in payment, by any commercially acceptable means, of any amount receivable under this title is not duly paid, in addition to any other penalties provided by law, there shall be paid as a penalty by the person who tendered such instrument, upon notice and demand by the Secretary, in the same manner as tax, an amount equal to 2 percent of the amount of such instrument, except that if the amount of such instrument is less than $1,250, the penalty under this section shall be $25 or the amount of such instrument, whichever is the lesser. This section shall not apply if the person tendered such instrument in good faith and with reasonable cause to believe that it would be duly paid.

Legislative History

Notes & Related Subsidiaries

Editorial Notes

Amendments

2010—Pub. L. 111–198, § 3(a)(2), substituted “such instrument” for “such check” wherever appearing. Pub. L. 111–198, § 3(a)(1), substituted “If any instrument in payment, by any commercially acceptable means, of any amount” for “If any check or money order in payment of any amount”. 2007—Pub. L. 110–28 substituted “$1,250” for “$750” and “$25” for “$15”. 1988—Pub. L. 100–647 substituted “2” for “1”, “$750” for “$500”, and “$15” for “$5”. 1976—Pub. L. 94–455 struck out “or his delegate” after “Secretary”.

Statutory Notes and Related Subsidiaries

Effective Date

of 2010 Amendment Pub. L. 111–198, § 3(b), July 2, 2010, 124 Stat. 1356, provided that: “The

Amendments

made by this section [amending this section] shall apply to instruments tendered after the date of the enactment of this Act [July 2, 2010].”

Effective Date

of 2007 Amendment Pub. L. 110–28, title VIII, § 8245(b), May 25, 2007, 121 Stat. 200, provided that: “The

Amendments

made by this section [amending this section] apply to checks or money orders received after the date of the enactment of this Act [May 25, 2007].”

Effective Date

of 1988 Amendment Pub. L. 100–647, title V, § 5071(b), Nov. 10, 1988, 102 Stat. 3681, provided that: “The amendment made by subsection (a) [amending this section] shall apply to checks or money orders received after the date of the enactment of this Act [Nov. 10, 1988].”

Reference

Citations & Metadata

Citation

26 U.S.C. § 6657

Title 26 — Internal Revenue Code

Last Updated

Apr 6, 2026

Release point: 119-73