Penalty
(a) In case of failure by any person required by this subtitle or the Virgin Islands income tax law or by regulation of the Director under this subtitle or the Virgin Islands income tax law to deposit on the date prescribed therefor any amount of tax imposed by this subtitle or the Virgin Islands income tax law in such government depository as is authorized under section 992(c) of this title to receive such deposit, unless it is shown that such failure is due to reasonable cause and not due to willful neglect, there shall be imposed upon such person a penalty of 1 percent of the amount of the underpayment if the failure is for not more than 1 month, with an additional 1 percent for each additional month or fraction thereof during which such failure continues, not exceeding 6 percent in the aggregate. For purposes of this subsection, the term “underpayment” means the excess of the amount of the tax required to be so deposited over the amount, if any, thereof deposited on or before the date prescribed therefor.
Penalty not imposed after due date for return
(b) For purposes of subsection (a) of this section, the failure shall be deemed not to continue beyond the last date (determined without regard to any extension of time) prescribed for payment of the tax required to be deposited or beyond the date the tax is paid, whichever is earlier.