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June 08, 1998
IRS Announces Quarterly Interest Rates
WASHINGTON - The Internal Revenue Service today announced that
interest rates for the calendar quarter beginning July 1, 1998, will
be seven (7) percent for overpayments, eight (8) percent for
underpayments, and ten (10) percent for large corporate
underpayments. The overpayment rate for the portion of a corporate
overpayment exceeding $10,000 will be five and onehalf (5.5)
percent.
Under the Internal Revenue Code, the rate of interest is
determined on a quarterly basis, the rate on underpayments is one
(1) percent higher than the rate on overpayments, and the rate for
large corporate underpayments is two (2) 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 one-half (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 April 1998.
Rev. Rul. 98-32, announcing the new rates of interest, is
attached and will appear in Internal Revenue Bulletin No. 1998-25,
dated June 22, 1998.
Part III Section 6621.-- Determination of Interest Rate
26 CFR 301.6621-1: Interest rate.
Rev. Rul. 98-32
Section 6621 of the Internal Revenue Code establishes different
rates for interest on tax overpayments and interest on tax
underpayments. Under Section 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 Section 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 Section 6601 on any large corporate underpayment, the underpayment
rate under Section 6621(a)(2) is determined by substituting "5 percentage
points" for 113 percentage points." See Section 6621(c) and Section 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 Section 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 Section 6621(b)(1) for any month applies during the first
calendar quarter beginning after such month.
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 Section 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 Section 6621, the Internal Revenue Service will
use the federal short-term rate based on daily compounding because
that rate is most consistent with Section 6621 which, pursuant to Section 6622,
is subject to daily compounding.
Rounded to the nearest full percent, the federal shortterm rate
based on daily compounding determined during the month of April 1998
is 5 percent. Accordingly, an overpayment rate of 7 percent and an
underpayment rate of 8 percent are established for the calendar
quarter beginning July 1, 1998. The overpayment rate for the portion
of a corporate overpayment exceeding $10,000 for the calendar
quarter beginning July 1, 1998, is 5.5 percent. The underpayment
rate for large corporate underpayments for the calendar quarter
beginning July 1, 1998, is 10 percent. These rates apply to amounts
bearing interest during that calendar quarter.
Interest factors for daily compound interest for annual rates of
5.5 percent, 7 percent, 8 percent, and 10 percent are published in
Tables 16, 19, 21, and 25 of Rev. Proc. 95-17, 1995-1 C.B. 556, 570,
573, 575, and 579. Annual interest rates to be compounded daily
pursuant to Section 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 andAccounting).
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
DAILY RATE TABLE
PERIOD RATE 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 2% 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 UNDERPAYMETNS
RATE TABLE PG 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% 75 529
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% 25 581
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% 71 679
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% 21 573
Oct. 1, 1994--Dec. 31, 1994 8% 21 575 9% 23 575
Jan. 1, 1995--Mar. 31, 1995 8% 21 575 9% 23 577
Apr. 1, 1995--Jun. 30, 1995 9% 23 577 10% 23 579
Jul. 1, 1995--Sep. 30, 1995 8% 21 575 9% 25 577
Oct. 1, 1995--Dec. 31, 1995 8% 21 575 9% 23 577
Jan. 1, 1996--Mar. 31, 1996 8% 69 623 9% 23 525
Apr. 1, 1996--Jun. 30, 1996 7% 67 621 8% 71 623
Jul. 1, 1996--Sep. 30, 1996 8% 69 623 9% 69 625
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% 25 583
Jan. 1, 1992--Mar. 31, 1992 11% 74 629
Apr. 1, 1992--Jun. 30, 1992 10% 74 627
Jul. 1, 1992--Sep. 30, 1992 9% 71 627
Oct. 1, 1992--Dec. 31, 1992 9% 73 652
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 10% 25 577
Jul. 1, 1994--Sep. 30, 1994 11% 27 577
Oct. 1, 1994--Dec. 31, 1994 11% 27 579
Jan. 1, 1995--Mar. 31, 1995 12% 29 581
Apr. 1, 1995--Jun. 30, 1995 11% 27 581
Jul. 1, 1995--Sep. 30, 1995 11% 27 581
Oct. 1, 1995--Dec. 31, 1995 11% 25 681
Jan. 1, 1996--Mar. 31, 1996 10% 73 628
Apr. 1, 1996--Jun. 30, 1996 11% 75 627
Jul. 1, 1996--Sep. 30, 1996 11% 75 629
Oct. 1, 1996--Dec. 31, 1996 11% 75 529
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
Apr. 1, 1998--Jun. 30, 1998 10% 25 579
Jul. 1, 1998--Sep. 30, 1998 10% 25 579
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