That is absurd...any legitimate bank can process an IRS check ...what they may need you to do is deposit it & wait for it to clear before taking the money out. Ask them again...& if you still get a NO then find another bank.
I have spoken to them couple of times about this issue, but they are not willing to process it.
Is this bank located in the United States? or some other country?
If in the United States, then it's time to start moving your bank accounts to some other bank.
....Unless, of course, if your bank is in the USA, and you do not have an actual account at that bank, it is true that some banks may not process a check over a certain size for you for cash.
You have the check, so the IRS is done-- they won't take it back and send you cash, for example. You need to figure this out yourself.
You may need to open a bank account and deposit the check. If you are overseas, you can ask at a US consulate office for them to recommend a bank that will handle it.