Rev. Rul. 83-76

Rev. Rul. 83-76 [FN1]

                       Internal Revenue Service
                                 Revenue Ruling

            ADJUSTED INTEREST RATE;  UNDERPAYMENTS AND OVERPAYMENTS

                             Published: May 2, 1983

SECTION 6621. - -DETERMINATION OF RATE OF INTEREST

  Adjusted interest rate;  underpayments and overpayments. The adjusted rate of interest on underpayments and overpayments, as determined under the provisions of section 6621(b) of the Code, will be 11 percent effective July 1, 1983.

ISSUE

  Under the provisions of section 6621 of the Internal Revenue Code, the Secretary is required to establish an adjusted rate of interest not later than April 15, 1983, to become effective July 1, 1983, if the adjusted prime rate charged by banks during the 6 month period ending on March 31, 1983 (rounded to the nearest full percent) differs from the interest rate under section 6621 in effect on March 31, 1983.

  Section 6621(c) of the Code defines the term "adjusted prime rate charged by banks" as the average predominant prime rate quoted by commercial banks to large businesses, as determined by the Board of Governors of the Federal Reserve System.

  The Board of Governors of the Federal Reserve System has determined that the average predominant prime rate quoted by commercial banks to large businesses during the 6 month period ending March 31, 1983, was 11.42 percent.  Rounded to 11 percent, this differs from the rate of 16 percent in effect on March 31, 1983.  Accordingly, an adjusted rate of interest of 11 percent per annum is established under section 6621(b) of the Code.  The adjusted rate will take effect on July 1, 1983, and will apply to amounts outstanding on that date or arising thereafter.

  Daily rates for compound interest for 11% were published in Table 17 of Rev. Proc. 83-7, 1983-7 I.R.B. 4, 21.

FN1. Also released as News Release IR-83-65, dated April 15, 1983.