Exemption certificate violations; penalties; exception

(A) An individual subject to withholding and required to supply information to his employer pursuant to Chapter 8, Title 12 is liable for a penalty of five hundred dollars for each of the following violations: (1) refusing or failing to provide a withholding exemption certificate; (2) providing a withholding exemption certificate that claims he is exempt from withholding; (3) providing exemptions on a withholding exemption certificate exceeding the number of exemptions to which he is entitled; or (4) requesting a waiver from withholding to which he is not entitled. (B) An additional five-hundred-dollar penalty is imposed each January first that a violation is not corrected. (C) The penalty does not apply to an individual described in subsection (A) who has a change in family circumstances that makes his withholding exemption certificate inaccurate unless his employer or the department has informed him to revise his withholding exemption certificate.