since it's tax season...

Supposedly, there is this urban myth that irate taxpayers will mail in their tax payments written on the back of a shirt -- "the shirt off their back" so to say.

So we discussed this hypothetical in class: Suppose an IRS tax agent receives a package from a taxpayer in the mail. When he opens the box, he sees that he has received a somewhat worn white dress shirt, with teh following written in black ink across the back of the shirt: "Pay to the order of the Internal Revenue Service $150,000." The taxpayer signed his name at the bottom, wrote "Secondhand Bank" next to it and also wrote a series of numbers that seemed to appear to be his account at Secondhand Bank.

Puzzled, the IRS agent wanted to find out if he could actually collect payment from the "shirt check." So the IRS agent took the shirt to Secondhand Bank and attempted to cash it. Secondhand Bank confirmed that taxpayer was one of their customers and that the numbers were indeed his account number at the bank, and that his account did indeed have enough funds to cover the $150,000 amount. But, Secondhand Bank refused to honor the shirt check because it was their policy that customers had to use the bank's forms in writing checks.

Who's wrong? Secondhand Bank or IRS Agent?

Neither. I will spare you by not listing the 20+ UCC* provisions that we could use to argue that the shirt check is indeed a negotiable instrument in which IRS Agent is permitted by law to collect payment on. The shirt check identified a person to make payment to, an amount, an account and thus it "ordered" Secondhand Bank to make the $150,000 payment to IRS. However, if Secondhand Bank had specifically written in its "terms and conditions of account agreement" with its customer, the taxpayer, that it is the bank's policy to use its forms only, then Secondhand Bank would not have to honor the payment of the shirt check. BUT, this means that IRS Agent can now sue the taxpayer for "bouncing" the shirt check.

Okay, I'm done teaching lessons about commercial transactions now. I promise to stop boring you.

*If you're a law student, past or present, you know what the UCC is. For all others, it's the Uniform Commercial Code and is currently the bane of my existence.