Rev. Rul. 85-47

Rev. Rul. 85-47 [FN1]

Internal Revenue Service

Revenue Ruling

ADJUSTED INTEREST RATE; UNDERPAYMENTS AND OVERPAYMENTS

Published: April 22, 1985

Section 6621.-Determination of Rate of Interest, 26 CFR 301.6621-1: Interest rate.

  Adjusted interest rate; underpayments and overpayments. The adjusted rate of interest on underpayments and overpayments, as determined under section 6621(b) of the Code, will be 11 percent through December 31, 1985.

  Section 6621(b) of the Internal Revenue Code provides for semiannual adjustment of the interest rate established under that section. Section 6621(b)(1) requires that these adjustments in the rate be established by October 15 and April 15, and be based on the average prime interest rate for the six-month period ending the previous September 30 or March 31, respectively.

  The Board of Governors of the Federal Reserve System has determined that the average prime interest rate for the six-month period ending March 31, 1985, was 11.17 percent. That rate, rounded to the nearest full percent, is 11 percent, a change of 2 percent from the rate of 13 percent in effect under the last determination made by the Internal Revenue Service. See Rev. Rul. 84-159, 1984- 44 I.R.B. 12. Accordingly, an adjusted rate of interest of 11 percent is established under section 6621(b). The adjusted rate will take effect on July 1, 1985, and will apply to amounts outstanding on that date or arising thereafter.

  Daily rates for compound interest for 11 percent were published in Table 17 of Rev. Proc. 83-7, 1983-1 C.B. 583, 600.

  Interest rates for prior periods are set forth in the following table:
Period                  Rate
February 1, 1980
-January 31, 1982   12%
February 1, 1982
-December 31, 1982  20%
January 1, 1983
-June 30, 1983      16% [FNa1]
July 1, 1983
-December 31, 1983  11% [FNa1]
January 1, 1984
-June 30, 1984      11% [FNa1]
July 1, 1984
-December 31, 1984  11% [FNa1]
January 1, 1985
-June 30, 1985      13% [FNa1]
FNa1. Compound Interest
FN1. Also released as News Release IR-85-36, dated April 12, 1985.

Rev. Rul. 85-47, 1985-1 C.B. 367, 1985-16 I.R.B. 10.