(1) Partial payments that are received by the department for payment of a tax liability and a collection service fee, if any, must be applied proportionately between the tax liability and the collection service fee. 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 percent of the total debt is coal severance tax, 40 percent is withholding, and 30 percent 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.