(1) Partial payments that are received by the department for payment of a collection service fee and tax liability must be applied proportionately between the collection service fee and the tax liability at the rate set by the debt collection internal service fund. Payment of the tax liability is applied in the order of tax, penalty, and then interest.
(2) Partial payments for a customer's tax liability shall be applied as directed by the customer as to account type, period, or order to apply.
(3) If customer direction is not provided, the payment will be applied in full to the oldest period first in the following order:
(a) first to tax (dollar for dollar until satisfied) ;
(b) then to penalty (if due) ; and
(c) then to interest (if due) .
(4) Payments not directed by the customer will be applied pro rata among the accounts being collected by the department. For example, if 30% of the total debt is coal severance tax, 40% is withholding, and 30% is income tax, and a partial payment is received, application of the payment will be applied pro rata according to the schedule shown in (1) until all debt is satisfied.
(5) The application of partial payments received by the department, as shown in (1) , will apply to payments processed beginning July 26, 2002.