(1) The taxes which the department enforces variously provide for the abatement or waiver of inter­est and/or penalties at the sound discretion of the department. These rules are guidelines for the uniform, fair, and equitable exercise of that discretion. It is a purpose of these rules to treat all similarly situated taxpayers in a similar manner. In evaluating each request for waiver or abatement of interest and/or penalty, the taxpayer's request will he considered on a case by case basis. Abatement or waiver of a penalty and/or interest will be considered the exception rather than the rule.

(2) The purpose of a penalty and interest on a penalty is to secure the proper and timely filing of a tax return or statement and the prompt payment of the tax by penalizing the delinquent taxpayer. The purpose of interest on a tax is, in part, to compensate the state OF MONTANA for the cost of money which is incurred while the tax is delinquent. Therefore, interest on the tax will rarely, if ever, be abated or waived by the depart­ment for a taxpayer who:

(a) files a tax return or statement or makes a tax payment over five days late;

(b) has previously filed a late tax return or statement or made a late payment; or

(c) has previously not complied with the tax law or regulations.

(3) Rules 42.3.101 through 42.3.114 are to be read, interpreted, and enforced as a whole in order to give full effect to each provision. A specific clause is not to be read or interpreted separately from the entire set of rules as a whole.

(4) Except as specifically provided by statute, the waiver or abatement of penalty and interest is a discretionary act by the department. "Discretion" means the power to do or to refrain from doing a certain thing. These rules do not make the exercise of the department's discretion to waive or abate penal­ty and interest mandatory or compulsory.