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December 11, 1997
IRS Announces Quarterly Interest Rates
WASHINGTON - The Internal Revenue Service today
announced that interest rates for the calendar quarter beginning January 1, 1998, will
remain at eight percent for overpayments, nine percent for underpayments, and eleven
percent for large corporate underpayments. The overpayment rate for the portion of a
corporate overpayment exceeding $10,000 will remain at 6.5 percent.
Under the Internal Revenue Code, the rate of interest is determined on a quarterly
basis, the rate on underpayments is one percent higher than the rate on overpayments, and
the rate for large corporate underpayments is two percent higher than the rate on
underpayments. The interest paid on the portion of a corporate overpayment of tax
exceeding $10,000 for a taxable period is the sum of the federal short-term rate plus 0.5
of a percentage point. The interest rates announced today are computed from the federal
short-term rate based on daily compounding determined during October 1997.
Rev. Rul. 97-53, announcing the new rates of interest, is attached and will appear
in Internal Revenue Bulletin No.1997-52, dated December 29, 1997.
Part I Section 6621.-- Determination of
Interest Rate 26 CFR 301.6621-1: Interest rate.
Rev. Rul. 97-53
Section 6621 of the Internal Revenue Code establishes different rates for interest
on tax overpayments and interest on tax underpayments. Under 6621(a)(1), the overpayment
rate is the sum of the federal short-term rate plus 2 percentage points, except the rate
for the portion of a corporate overpayment of tax exceeding $10,000 for a taxable period
is the sum of the federal short-term rate plus 0.5 of a percentage point for interest
computations made after December 31, 1994. Under 6621(a)(2), the underpayment rate is the
sum of the federal short-term rate plus 3 percentage points.
Section 6621(c) provides that for purposes of interest payable under 6601 on any
large corporate underpayment, the underpayment rate under 6621(a)(2) is determined by
substituting "5 percentage points" for "3 percentage points." See
6621(c) and 301.6621-3 of the Regulations on Procedure and Administration for the
definition of a large corporate underpayment and for the rules for determining the
applicable date. Section 6621(c) and 301.6621-3 are generally effective for periods after
December 31, 1990.
Section 6621(b)(1) provides that the Secretary will determine the federal short-term
rate for the first month in each calendar quarter.
Section 6621(b)(2)(A) provides that the federal short-term
rate determined under 6621(b)(1) for any month applies during the first calendar quarter
beginning after such month.
Section 6621(b)(2)(B) provides that in determining the
addition to tax under 6654 for failure to pay estimated tax for any taxable year, the
federal short-term rate that applies during the third month following such taxable year
also applies during the first 15 days of the fourth month following such taxable year.
Section 6621(b)(3) provides that the federal short-term rate
for any month is the federal short-term rate determined during such month by the Secretary
in accordance with 1274(d), rounded to the nearest full percent (or, if a multiple of 1/2
of 1 percent, the rate is increased to the next highest full percent).
Notice 88-59, 1988-1 C.B. 546, announced that, in determining
the quarterly interest rates to be used for overpayments and underpayments of tax under
6621, the Internal Revenue Service will use the federal short-term rate based on daily
compounding because that rate is most consistent with 6621 which, pursuant to 6622, is
subject to daily compounding.
Rounded to the nearest full percent, the federal short-term
rate based on daily compounding determined during the month of October 1997 is 6 percent.
Accordingly, an overpayment rate of 8 percent and an underpayment rate of 9 percent are
established for the calendar quarter beginning January 1, 1998. The overpayment rate for
the portion of a corporate overpayment exceeding $10,000 for the calendar quarter
beginning January 1, 1998, is 6.5 percent. The underpayment rate for large corporate
underpayments for the calendar quarter beginning January 1, 1998, is 11 percent. These
rates apply to amounts bearing interest during that calendar quarter.
The 9 percent rate also applies to estimated tax underpayments
for the first calendar quarter in 1998 and for the first 15 days in April 1998.
Interest factors for daily compound interest for annual rates
of 6.5 percent, 8 percent, 9 percent, and 11 percent are published in Tables 18, 21, 23,
and 27 of Rev. Proc. 95-17, 1995-1 C.B. 556, 572, 575, 577, and 581.
Annual interest rates to be compounded daily pursuant to 6622
that apply for prior periods are set forth in the tables accompanying this revenue ruling.
DRAFTING INFORMATION
The principal author of this revenue ruling is Raymond Bailey
of the Office of Assistant Chief Counsel (Income Tax and Accounting). For further
information regarding this revenue ruling, contact Mr. Bailey on (202) 622-6226 (not a
toll-free call).
TABLE OF INTEREST RATES
PERIODS BEFORE JUL. 1, 1975 - PERIODS ENDING DEC. 31, 1986
OVERPAYMENTS AND UNDERPAYMENTS
PERIOD RATE DAILY RATE TABLE
IN 1995-1 C.B.
Before Jul. 1, 1975 6% Table 2, pg. 557
Jul. 1, 1975--Jan. 31, 1976 9% Table 4, pg. 559
Feb. 1, 1976--Jan. 31, 1978 7% Table 3, pg. 558
Feb. 1, 1978--Jan. 31, 1980 6% Table 2, pg. 557
Feb. 1, 1980--Jan. 31, 1982 12% Table 5, pg. 560
Feb. 1, 1982--Dec. 31, 1982 20% Table 6, pg. 560
Jan. 1, 1983--Jun. 30, 1983 16% Table 37, pg. 591
Jul. 1, 1983--Dec. 31, 1983 11% Table 27, pg. 581
Jan. 1, 1984--Jun. 30, 1984 11% Table 75, pg. 629
Jul. 1, 1984--Dec. 31, 1984 11% Table 75, pg. 629
Jan. 1, 1985--Jun. 30, 1985 13% Table 31, pg. 585
Jul. 1, 1985--Dec. 31, 1985 11% Table 27, pg. 581
Jan. 1, 1986--Jun. 30, 1986 10% Table 25 pg. 579
Jul. 1, 1986--Dec. 31, 1986 9% Table 23, pg. 577
TABLE OF INTEREST RATES
FROM JAN. 1, 1987 - PRESENT
OVERPAYMENTS UNDERPAYMENTS
RATE TABLE PG
1995-1 C.B. 1995-1 C.B.
Jan. 1, 1987--Mar. 31, 1987 8% 21 575 9% 23 577
Apr. 1, 1987--Jun. 30, 1987 8% 21 575 9% 23 577
Jul. 1, 1987--Sep. 30, 1987 8% 21 575 9% 23 577
Oct. 1, 1987--Dec. 31, 1987 9% 23 577 10% 25 579
Jan. 1, 1988--Mar. 31, 1988 10% 73 627 11% 75 629
Apr. 1, 1988--Jun. 30, 1988 9% 71 625 10% 73 627
Jul. 1, 1988--Sep. 30, 1988 9% 71 625 10% 73 627
Oct. 1, 1988--Dec. 31, 1988 10% 73 627 11% 75 629
Jan. 1, 1989--Mar. 31, 1989 10% 25 579 11% 27 581
Apr. 1, 1989--Jun. 30, 1989 11% 27 581 12% 29 583
Jul. 1, 1989--Sep. 30, 1989 11% 27 581 12% 29 583
Oct. 1, 1989--Dec. 31, 1989 10% 25 579 11% 27 581
Jan. 1, 1990--Mar. 31, 1990 10% 25 579 11% 27 581
Apr. 1, 1990--Jun. 30, 1990 10% 25 579 11% 27 581
Jul. 1, 1990--Sep. 30, 1990 10% 25 579 11% 27 581
Oct. 1, 1990--Dec. 31, 1990 10% 25 579 11% 27 581
Jan. 1, 1991--Mar. 31, 1991 10% 25 579 11% 27 581
Apr. 1, 1991--Jun. 30, 1991 9% 23 577 10% 25 579
Jul. 1, 1991--Sep. 30, 1991 9% 23 577 10% 25 579
Oct. 1, 1991--Dec. 31, 1991 9% 23 577 10% 25 579
Jan. 1, 1992--Mar. 31, 1992 8% 69 623 9% 71 625
Apr. 1, 1992--Jun. 30, 1992 7% 67 621 8% 69 623
Jul. 1, 1992--Sep. 30, 1992 7% 67 621 8% 69 623
Oct. 1, 1992--Dec. 31, 1992 6% 65 619 7% 67 621
Jan. 1, 1993--Mar. 31, 1993 6% 17 571 7% 19 573
Apr. 1, 1993--Jun. 30, 1993 6% 17 571 7% 19 573
Jul. 1, 1993--Sep. 30, 1993 6% 17 571 7% 19 573
Oct. 1, 1993--Dec. 31, 1993 6% 17 571 7% 19 573
Jan. 1, 1994--Mar. 31, 1994 6% 17 571 7% 19 573
Apr. 1, 1994--Jun. 30, 1994 6% 17 571 7% 19 573
Jul. 1, 1994--Sep. 30, 1994 7% 19 573 8% 21 575
Oct. 1, 1994--Dec. 31, 1994 8% 21 575 9% 23 577
Jan. 1, 1995--Mar. 31, 1995 8% 21 575 9% 23 577
Apr. 1, 1995--Jun. 30, 1995 9% 23 577 10% 25 579
Jul. 1, 1995--Sep. 30, 1995 8% 21 575 9% 23 577
Oct. 1, 1995--Dec. 31, 1995 8% 21 575 9% 23 577
Jan. 1, 1996--Mar. 31, 1996 8% 69 623 9% 71 625
Apr. 1, 1996--Jun. 30, 1996 7% 67 621 8% 69 623
Jul. 1, 1996--Sep. 30, 1996 8% 69 623 9% 71 625
Oct. 1, 1996--Dec. 31, 1996 8% 69 623 9% 71 625
Jan. 1, 1997--Mar. 31, 1997 8% 21 575 9% 23 577
Apr. 1, 1997--Jun. 30, 1997 8% 21 575 9% 23 577
Jul. 1, 1997--Sep. 30, 1997 8% 21 575 9% 23 577
Oct. 1, 1997--Dec. 31, 1997 8% 21 575 9% 23 577
Jan. 1, 1998--Mar. 31, 1998 8% 21 575 9% 23 577
TABLE OF INTEREST RATES FOR
LARGE CORPORATE UNDERPAYMENTS
FROM JANUARY 1, 1991 - PRESENT
RATE TABLE PG
1995-1 C.B.
Jan. 1, 1991--Mar. 31, 1991 13% 31 585
Apr. 1, 1991--Jun. 30, 1991 12% 29 583
Jul. 1, 1991--Sep. 30, 1991 12% 29 583
Oct. 1, 1991--Dec. 31, 1991 12% 29 583
Jan. 1, 1992--Mar. 31, 1992 11% 75 629
Apr. 1, 1992--Jun. 30, 1992 10% 73 627
Jul. 1, 1992--Sep. 30, 1992 10% 73 627
Oct. 1, 1992--Dec. 31, 1992 9% 71 625
Jan. 1, 1993--Mar. 31, 1993 9% 23 577
Apr. 1, 1993--Jun. 30, 1993 9% 23 577
Jul. 1, 1993--Sep. 30, 1993 9% 23 577
Oct. 1, 1993--Dec. 31, 1993 9% 23 577
Jan. 1, 1994--Mar. 31, 1994 9% 23 577
Apr. 1, 1994--Jun. 30, 1994 9% 23 577
Jul. 1, 1994--Sep. 30, 1994 10% 25 579
Oct. 1, 1994--Dec. 31, 1994 11% 27 581
Jan. 1, 1995--Mar. 31, 1995 11% 27 581
Apr. 1, 1995--Jun. 30, 1995 12% 29 583
Jul. 1, 1995--Sep. 30, 1995 11% 27 581
Oct. 1, 1995--Dec. 31, 1995 11% 27 581
Jan. 1, 1996--Mar. 31, 1996 11% 75 629
Apr. 1, 1996--Jun. 30, 1996 10% 73 627
Jul. 1, 1996--Sep. 30, 1996 11% 75 629
Oct. 1, 1996--Dec. 31, 1996 11% 75 629
Jan. 1, 1997--Mar. 31, 1997 11% 27 581
Apr. 1, 1997--Jun. 30, 1997 11% 27 581
Jul. 1, 1997--Sep. 30, 1997 11% 27 581
Oct. 1, 1997--Dec. 31, 1997 11% 27 581
Jan. 1, 1998--Mar. 31, 1998 11% 27 581
TABLE OF INTEREST RATES FOR CORPORATE
PAYMENTS EXCEEDING $10,000
FROM JANUARY 1, 1995 - PRESENT
RATE TABLE PG
1995-1
Jan. 1, 1995--Mar. 31, 1995 6.5% 18 572
Apr. 1, 1995--Jun. 30, 1995 7.5% 20 574
Jul. 1, 1995--Sep. 30, 1995 6.5% 18 572
Oct. 1, 1995--Dec. 31, 995 6.5% 18 572
Jan. 1, 1996--Mar. 31, 1996 6.5% 66 620
Apr. 1, 1996--Jun. 30, 1996 5.5% 64 618
Jul. 1, 1996--Sep. 30, 1996 6.5% 66 620
Oct. 1, 1996--Dec. 31, 1996 6.5% 66 620
Jan. 1, 1997--Mar. 31, 1997 6.5% 18 572
Apr. 1, 1997--Jun. 30, 1997 6.5% 18 572
Jul. 1, 1997--Sep. 30, 1997 6.5% 18 572
Oct. 1, 1997--Dec. 31, 1997 6.5% 18 572
Jan. 1, 1998--Mar. 31, 1998 6.5% 18 572
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