[Code of Federal Regulations]
[Title 26, Volume 18]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR301.6657-1]

[Page 419]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 301_PROCEDURE AND ADMINISTRATION--Table of Contents
 
   Additions to the Tax, Additional Amounts, and Assessable Penalties
 
Sec. 301.6657-1  Bad checks.

    (a) In general. Except as provided in paragraph (b) of this section, 
if a check or money order is tendered in the payment of any amount 
receivable under the Code, and such check or money order is not paid 
upon presentment, a penalty of one percent of the amount of the check or 
money order, in addition to any other penalties provided by law shall be 
paid by the person who tendered such check or money order. If, however, 
the amount of the check or money order is less than $500, the penalty 
shall be $5 or the amount of the check or money order, whichever amount 
is the lesser. Such penalty shall be paid in the same manner as tax upon 
the issuance of a notice and demand therefor.
    (b) Reasonable cause. If payment is refused upon presentment of any 
check or money order and the person who tendered such check or money 
order establishes to the satisfaction of the district director that it 
was tendered in good faith with reasonable cause to believe that it 
would be duly paid, the penalty set forth in paragraph (a) of this 
section shall not apply.