Interest and Penalties

(a) Interest . If any amount of withholding tax is not paid to the Commissioner on or before its statutory due date, there shall be added to the tax interest at the rate of the Federal short-term rate determined under Code § 6621(b) in effect for the taxable year, plus four percentage points, compounded daily. (b) Penalty for Late Filing of Return . The penalty for late filing of a withholding return is 1% of the balance due for each month or fraction of a month that the return is late, up to a maximum of 25% of the tax amount. (c) Penalty for Late Payment of Tax . The penalty for late payment of withholding tax is 1/2 of 1% of the balance due for each month or fraction of a month that the payment is late, up to a maximum of 25% of the tax amount. Taxpayers required to deposit or to make payment of tax in advance of the filing of the return with respect to such payment are also subject to a penalty of 5% of the amount of the underpayment if the taxpayer fails to make such deposit or payment on or before the date prescribed therefor, unless it is shown that such failure is due to reasonable cause and not to willful neglect. (d) Penalty for Failure to File . A taxpayer that has failed to file a return or has filed an incorrect or insufficient return, and after notification by the Commissioner refuses or neglects within thirty days after the date of such notification to file a proper return, or if a taxpayer has filed a false or fraudulent return or has filed a return with a willful attempt in any manner to defeat or evade the tax, the Commissioner may determine the tax due, according to his best information and belief, and may assess the same at not more than double the amount so determined, which additional tax shall be in addition to other penalties. (e) Criminal Penalties . A person who fails to pay tax, make a return, keep records, or supply information as required by law or regulation is guilty of a misdemeanor and subject to a fine of up to $25,000 (or $100,000 in the case of a corporation) or imprisonment for up to one year, or both. A person who, in connection with the filing of a tax return or the payment of any tax, receives money from another person on the understanding that it is to be paid over to the commissioner to discharge, in whole or in part, the other person's tax liability and willfully fails to pay over the same to the commissioner shall be guilty of a felony and subject to a fine of up to $100,000 (or $500,000 in the case of a corporation) or imprisonment for up to three years, or both. (f) Who is Liable . Every employer or other person required to withhold who fails to withhold or pay to the Commissioner any sums required by the withholding statutes to be withheld or paid shall be personally and individually liable therefor to the commonwealth. Any sum or sums withheld in accordance with the provisions of M.G.L. c. 62B, § 2 are deemed to be held in trust for the commonwealth. If an employer or other person required to withhold fails to withhold and thereafter the tax against which the withholding tax may be credited is paid, the withholding tax shall not be collected from the employer or other person required to withhold, but the employer or other person required to withhold will still be liable for any penalties or addition to the tax otherwise applicable to the failure to withhold. In the event an employer or other person required to withhold fails to withhold and pay over to the Commissioner any amount required to be withheld under M.G.L. c. 62B, § 2, such amount shall be assessed against such person, under the provisions of M.G.L. c. 62C, §§ 26 through 29.