§ 684 — Interest on underpayment

§ 684. Interest on underpayment.-- (a) General.--If any amount of\nincome tax is not paid on or before the last date prescribed in this\narticle for payment, interest on such amount at the underpayment rate\nset by the commissioner pursuant to section six hundred ninety-seven of\nthis part, or if no rate is set, at the rate of seven and one-half\npercent per annum shall be paid for the period from such last date to\nthe date paid, whether or not any extension of time for payment was\ngranted. Interest under this subsection shall not be paid if the amount\nthereof is less than one dollar. If the time for filing of a return of\ntax withheld by an employer is extended, the employer shall pay interest\nfor the period for which the extension is granted and may not charge\nsuch interest to the employee.\n (b) Exception as to estimated tax.--This section shall not apply to\nany failure to pay estimated tax.\n (c) Exception for mathematical or clerical error.--No interest shall\nbe imposed on any underpayment of tax due solely to mathematical or\nclerical error if the taxpayer files a return within the time prescribed\nin this article (including any extension of time) and pays the amount of\nunderpayment within three months after the due date of such return, as\nit may be extended.\n (d) Suspension of interest on deficiencies.--If a waiver of\nrestrictions on assessment of a deficiency has been filed by the\ntaxpayer, and if notice and demand by the tax commission for payment of\nsuch deficiency is not made within thirty days after the filing of such\nwaiver, interest shall not be imposed on such deficiency for the period\nbeginning immediately after such thirtieth day and ending with the date\nof notice and demand.\n (e) Tax reduced by carryback.--If the amount of tax for any taxable\nyear is reduced by reason of a carryback of a net operating loss, such\nreduction in tax shall not affect the computation of interest under this\nsection for the period ending with the filing date for the taxable year\nin which the net operating loss arises. Such filing date shall be\ndetermined without regard to extensions of time to file.\n (f) Interest treated as tax.--Interest under this section shall be\npaid upon notice and demand and shall be assessed, collected and paid in\nthe same manner as income tax. Any reference in this article to the tax\nimposed by this article shall be deemed also to refer to interest\nimposed by this section on such tax.\n (g) Interest on penalties or additions to tax.--Interest shall be\nimposed under subsection (a) of this section in respect of any\nassessable penalty or addition to tax only if such assessable penalty or\naddition to tax is not paid within twenty-one calendar days from the\ndate of the notice and demand therefor under subsection (b) of section\nsix hundred ninety-two of this article (ten business days if the amount\nfor which such notice and demand is made equals or exceeds one hundred\nthousand dollars), and in such case interest shall be imposed only for\nthe period from such date of the notice and demand to the date of\npayment.\n (h) Payment within specified period after notice and demand.--If\nnotice and demand is made for payment of any amount under subsection (b)\nof section six hundred ninety-two of this article, and if such amount is\npaid within twenty-one calendar days (ten business days if the amount\nfor which such notice and demand is made equals or exceeds one hundred\nthousand dollars) after the date of such notice and demand, interest\nunder this section on the amount so paid shall not be imposed for the\nperiod after the date of such notice and demand.\n (i) Limitation on assessment and collection.--Interest prescribed\nunder this section may be assessed and collected at any time during the\nperiod within which the tax or other amount to which such interest\nrelates may be assessed and collected, respectively.\n (j) Interest on erroneous refund.--Any portion of tax or other amount\nwhich has been erroneously refunded, and which is recoverable by the\ncommissioner, shall bear interest at the underpayment rate set by the\ncommissioner pursuant to section six hundred ninety-seven of this part,\nor if no rate is set, at the rate of seven and one-half percent per\nannum from the date of the payment of the refund, but only if it appears\nthat any part of the refund was induced by fraud or a misrepresentation\nof a material fact.\n (k) Satisfaction by credits.--If any portion of a tax is satisfied by\ncredit of an overpayment, then no interest shall be imposed under this\nsection on the portion of the tax so satisfied for any period during\nwhich, if the credit had not been made, interest would have been\nallowable with respect to such overpayment.\n