Home Publications Guides, Manuals, and Reference Materials County Tax Collectors' Reference Manual (2012) Chapter 5000 Redemptions 5320-5321 Installment Plan: Redemption Certificates - Special Circumstances

5320-5321 Installment Plan: Redemption Certificates - Special Circumstances

5320. RETURNED CHECKS
If negotiable paper is returned unpaid by the bank on which it is drawn, the record of payment should be canceled, and the tax lien continues as though no attempt at payment had been made (Rev. & Tax. Code §§2509, 2510).

A notice of the cancellation must be sent immediately to the person tendering the dishonored negotiable paper (Rev. & Tax. Code §2510). The redemptioner may be determined liable to the county for (in addition to the amount owed) damages of three times the amount of the check, but in no case less than $100 nor more than $1,500 (M-1244).

After unpaid negotiable paper is returned to the depositing county officer, the tax collector may charge the person who attempted payment a fee not to exceed the cost of making required notifications to the person, processing the returned unpaid negotiable paper, and making the required cancellations on the tax roll (delinquent abstract).

This fee amount shall be set by the board of supervisors and shall be subject to the fee review procedures required by Government Code section 54986. The fee may be added to the tax bill (abstract) and collected in the same manner as costs recovered under Revenue and Taxation Code section 2621 (Rev. & Tax. Code §2509.1).

5321. INCORRECT AMOUNTS
An overage fund and a cash difference fund may be established under the authority of Government Code section 29370 et seq. Overpayments not exceeding $10, if not refunded, must be deposited in the overage fund. The cash difference fund must be authorized by resolution of the board of supervisors. It may be used to make up short payments of up to $10. Fund records must be kept identifying the person whose account was credited with making the insufficient payment and specifying the amount short (Rev. & Tax. Code §2611.5).

When an amount paid to the county for any tax, assessment, penalty, cost or interest exceeds the amount due and the excess does not exceed ten dollars ($10), the excess amount may be deposited in the overage account. If the excess amount is not so deposited, it should be refunded to the person making the payment.

The cash difference account may be expended, maintained, or replenished by accounting entries into a cash difference account and an overage account, maintained in the county’s automated accounting system. All transfers between the fund and the accounts may be made and retained in electronic data processing equipment and no written reports need be prepared by the auditor or the treasurer. When approved according to Government Code section 29370.1, replenishment of the cash difference account may be accomplished by the county auditor through a journal entry or electronic funds transfer from the county's general fund (Rev. & Tax. Code §2611.5).

It is good practice to hold in trust a mailed payment short more than $10 and to take prompt action to collect the difference before additional penalties accrue or the installment plan defaults. If the property will become subject to sale or if a large increase in penalties is imminent, some tax collectors apply the redemption remittance on an installment plan to protect the taxpayer.