September 15, 2003
Change in Interest Rates
for the Fourth Quarter of 2003
WASHINGTON - The Internal Revenue Service today announced there will be a change in the interest rates for the calendar quarter beginning October 1, 2003. The interest rates are as follows:
- four (4) percent for overpayments [three (3) percent in the case of a corporation];
- four (4) percent for underpayments;
- six (6) percent for large corporate underpayments; and
- one and one-half (1.5) percent for the portion of a corporate overpayment exceeding $10,000.
Under the Internal Revenue Code, the rate of interest is determined on a quarterly basis. For taxpayers other than corporations, the overpayment and underpayment rate is the federal short-term rate plus 3 percentage points. Generally, in the case of a corporation, the underpayment rate is the federal short-term rate plus 3 percentage points and the overpayment rate is the federal short-term rate plus 2 percentage points. The rate for large corporate underpayments is the federal short-term rate plus 5 percentage points. The rate on the portion of a corporate overpayment of tax exceeding $10,000 for a taxable period is 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 July 2003.
Rev. Rul. 2003-104, announcing the new rates of interest, is attached and will appear in Internal Revenue Bulletin No. 2003-39, dated September 29, 2003.
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