Section 684. Interest on underpayment

--  (a) General.--If any amount of
  income tax is not paid on or before the last  date  prescribed  in  this
  article  for  payment,  interest on such amount at the underpayment rate
  set by the commissioner pursuant to section six hundred ninety-seven  of
  this  part,  or  if  no  rate  is set, at the rate of seven and one-half
  percent per annum shall be paid for the period from such  last  date  to
  the  date  paid,  whether  or  not any extension of time for payment was
  granted. Interest under this subsection shall not be paid if the  amount
  thereof  is  less than one dollar. If the time for filing of a return of
  tax withheld by an employer is extended, the employer shall pay interest
  for the period for which the extension is granted  and  may  not  charge
  such interest to the employee.
    (b)  Exception  as  to estimated tax.--This section shall not apply to
  any failure to pay estimated tax.
    (c) Exception for mathematical or clerical error.--No  interest  shall
  be  imposed  on  any  underpayment  of tax due solely to mathematical or
  clerical error if the taxpayer files a return within the time prescribed
  in this article (including any extension of time) and pays the amount of
  underpayment within three months after the due date of such  return,  as
  it may be extended.
    (d)   Suspension   of   interest  on  deficiencies.--If  a  waiver  of
  restrictions on assessment  of  a  deficiency  has  been  filed  by  the
  taxpayer,  and if notice and demand by the tax commission for payment of
  such deficiency is not made within thirty days after the filing of  such
  waiver,  interest shall not be imposed on such deficiency for the period
  beginning immediately after such thirtieth day and ending with the  date
  of notice and demand.
    (e)  Tax  reduced  by carryback.--If the amount of tax for any taxable
  year is reduced by reason of a carryback of a net operating  loss,  such
  reduction in tax shall not affect the computation of interest under this
  section  for the period ending with the filing date for the taxable year
  in which the net operating  loss  arises.  Such  filing  date  shall  be
  determined without regard to extensions of time to file.
    (f)  Interest  treated  as  tax.--Interest under this section shall be
  paid upon notice and demand and shall be assessed, collected and paid in
  the same manner as income tax. Any reference in this article to the  tax
  imposed  by  this  article  shall  be  deemed  also to refer to interest
  imposed by this section on such tax.
    (g) Interest on penalties or  additions  to  tax.--Interest  shall  be
  imposed  under  subsection  (a)  of  this  section  in  respect  of  any
  assessable penalty or addition to tax only if such assessable penalty or
  addition to tax is not paid within twenty-one  calendar  days  from  the
  date  of  the notice and demand therefor under subsection (b) of section
  six hundred ninety-two of this article (ten business days if the  amount
  for  which  such notice and demand is made equals or exceeds one hundred
  thousand dollars), and in such case interest shall be imposed  only  for
  the  period  from  such  date  of  the  notice and demand to the date of
  payment.
    (h) Payment within  specified  period  after  notice  and  demand.--If
  notice and demand is made for payment of any amount under subsection (b)
  of section six hundred ninety-two of this article, and if such amount is
  paid  within  twenty-one  calendar days (ten business days if the amount
  for which such notice and demand is made equals or exceeds  one  hundred
  thousand  dollars)  after  the  date of such notice and demand, interest
  under this section on the amount so paid shall not be  imposed  for  the
  period after the date of such notice and demand.
    (i)  Limitation  on  assessment  and  collection.--Interest prescribed
  under this section may be assessed and collected at any time during  the

  period  within  which  the  tax  or  other amount to which such interest
  relates may be assessed and collected, respectively.
    (j)  Interest on erroneous refund.--Any portion of tax or other amount
  which has been erroneously refunded, and which  is  recoverable  by  the
  commissioner,  shall  bear  interest at the underpayment rate set by the
  commissioner pursuant to section six hundred ninety-seven of this  part,
  or  if  no  rate  is  set, at the rate of seven and one-half percent per
  annum from the date of the payment of the refund, but only if it appears
  that any part of the refund was induced by fraud or a  misrepresentation
  of a material fact.
    (k)  Satisfaction by credits.--If any portion of a tax is satisfied by
  credit of an overpayment, then no interest shall be imposed  under  this
  section  on  the  portion  of the tax so satisfied for any period during
  which, if the credit  had  not  been  made,  interest  would  have  been
  allowable with respect to such overpayment.