Indiana – Bad Check Penalties Reduced

SALT Report 3102 – The Indiana Department of Revenue updated its guidance regarding dishonored check penalties to reflect recent legislative changes. Specifically, the notice provides that if a taxpayer does not respond to the Department’s demand for payment of tax and penalties associated with a dishonored check within 10 days of the date the notice was mailed, a penalty of 30% of the unpaid tax, or the face value of the dishonored check will be imposed.

Prior to the change, the penalty for a dishonored check was 100% of the unpaid tax or the face value of the dishonored check whichever was smaller.

These provisions are effective January 1, 2014.

For Further Information

Indiana Department of Revenue – Commissioner’s Directive No. 37