Bad checks; penalty
Sec. 5. (a) If a person makes a tax payment with a check and the
department is unable to obtain payment on the check for its full face
amount when the check is presented for payment through normal
banking channels, a penalty of ten percent (10%) of the unpaid tax
or the face value of the check, whichever is smaller, is imposed.
(b) When a penalty is imposed under subsection (a), the
department shall notify the person by mail that the check was not
honored and that the person has ten (10) days after the date the notice
is mailed to pay the tax and the penalty either in cash, by certified
check, or other guaranteed payment. If the person fails to make the
payment within the ten (10) day period, the penalty is increased to
one hundred percent (100%) multiplied by the face value of the
check or the unpaid tax, whichever is smaller.
(c) If the person subject to the penalty under this section can show
that there is reasonable cause for the check not being honored, the
department may waive the penalty imposed under this section.
As added by Acts 1980, P.L.61, SEC.1. Amended by P.L.26-1985,
SEC.17; P.L.18-1994, SEC.44.
Last modified: May 28, 2006