Cashing Corporate Checks

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Question:

I work at a local community bank, where we know all of our customers real well. Question: A check payable to corporation, customer brings in to cash. He is signer on account. Is there a problem as to why we would not cash the check, since he is one of the signers.

Answer:

This problem seems to pop up all over the place. The IRS takes the stance that the only good reason to cash a check payable to a corporation is to evade taxes. You should not aid and abet that particular crime! Whether you know your customer real well or not, a check payable to a corporation MUST be deposited into the corporate account in full. After it is deposited, if you wish to credit the account as a cash deposit, do so, and then let your customer write a check on the account. That way you're both safe.

First published on BankersOnline.com 12/3/01