32 V.S.A. § 3112 — Allocation of payments

(a) Any payment received by the Commissioner from any taxpayer may, notwithstanding any
direction by the taxpayer to the contrary, be applied to the taxpayer’s liability
for any tax administered by the Commissioner and for any period. Any payment may,
with respect to any taxable period, be applied first to the amount of any interest,
next to the amount of any penalty, next to the amount of any fee, and finally to the
amount of any unpaid tax liability for that period.
(b) The Commissioner may treat any refund payment owed by the Commissioner to a taxpayer
as if it were a payment received from the taxpayer and may apply the payment in accordance
with subsection (a) of this section.
(c) The provisions of this section shall apply notwithstanding any appeal by the taxpayer. (