Note:

If the taxpayer pays after the following workday, penalties and interest will accrue from the due date, even though the normal return due date was a weekend or legal holiday.

Apply payments in the following order:

Tax

Penalties

Interest

Add additional tax assessments to the original tax to arrive at the total corrected balance of tax due on the RDD. Because of the above order in which payments are applied, a payment which previously paid penalty and/or interest on an earlier assessment may now pay an additional tax assessment. Any remaining credit will apply to the penalty and interest. This actually reduces the amount of interest assessed on additional tax assessments, and may also reduce or completely eliminate the FTP penalty.

When manually computing interest on a tax module, use the running module balance method so that all transactions in the module are in included in the computation. See IRM 20.2.5.2.3, Steps to Compute Interest.