.01 Order of Payment for Unpaid Income Tax.

A. Income tax payments received by the Comptroller shall be applied as follows:

(1) Payments accompanying returns shall be applied to the period covered by the return in the following manner:

(a) First to any penalty;

(b) Second to accrued interest; and

(c) Third to the unpaid tax.

(2) All other payments shall be applied to the earliest delinquent tax year in the following manner:

(a) First to any penalty;

(b) Second to accrued interest; and

(c) Third to the unpaid tax.

B. A refund of income tax due a taxpayer shall be applied first as provided for in §A(2) of this regulation, and then in the following order of priority:

(1) To any debt collection intercept under COMAR 03.04.05 or 03.04.06; and

(2) To the taxpayer of any remaining balance.