REVENUE RULE 91-65

1991-2 C.B. 432, 1991-51 I.R.B. 1.

Internal Revenue Service
Revenue Ruling

INTEREST RATES; UNDERPAYMENTS AND OVERPAYMENTS

Published: December 9, 1991

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

Interest rates; underpayments and overpayments. The rate of interest determined under section 6621 of the Code for the calendar quarter beginning January 1, 1992, will be 8 percent for overpayments, 9 percent for underpayments and 11 percent for large corporate underpayments.

Section 6621 of the Internal Revenue Code establishes differential rates for allowance of interest on tax overpayments and assessment of interest on tax underpayments. Under section 6621(a)(1), the overpayment rate is the sum of the short-term federal rate plus 2 percentage points. Under section 6621(a)(2), the underpayment rate is the sum of the short-term federal rate plus 3 percentage points.

Section 6621(b)(1) of the Code provides that the Secretary shall determine the federal short-term rate for the first month in each calendar quarter.

Section 6621(b)(2)(A) of the Code provides that the federal short-term rate determined under section 6621(b)(1) for any month shall apply during the first calendar quarter beginning after such month.

Section 6621(b)(2)(B) of the Code provides that in determining the addition to tax under section 6654 for failure to pay estimated tax for any taxable year, the federal short-term rate which applies during the 3rd month following such taxable year shall also apply during the first 15 days of the 4th month following such taxable year.

Section 6621(b)(3) of the Code provides that the federal short-term rate for any month shall be 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 shall be 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 of the Code, 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 short-term rate based on daily compounding determined during the month of October 1991 is 6 percent. Accordingly, an overpayment rate of 8 percent and an underpayment rate of 9 percent is established for the calendar quarter beginning January 1, 1992. The underpayment rate for large corporate underpayments for the calendar quarter beginning January 1, 1992, is 11 percent. The rates apply to amounts bearing interest during that calendar quarter.  The 9 percent rate also applies to estimated tax underpayments for the quarter and for the first 15 days in April.  Interest factors for daily compound interest for annual rates of 8 percent, 9 percent, and 11 percent were published in Tables 38, 39 and 41 of Rev. Proc. 83-7, 1983-1 C.B. 583, 622, 623, and 625.  Annual interest rates to be compounded daily pursuant to section 6622 of the Code that apply for prior periods are set forth in the accompanying tables.

DRAFTING INFORMATION

The principal author of this revenue ruling is Marcia Rachy of the Office of the Assistant Chief Counsel (Income Tax & Accounting.) For further information regarding this revenue ruling contact Ms. Rachy on (202) 566-3886 (not a toll- free call).

TABLE OF INTEREST RATES
PERIODS BEFORE JUL. 1, 1975 DEC. 31, 1986

       Before Jul. 1, 1975  6% Table  2, pg. 586

Rul. 1, 1975-Jan. 31, 1976  9% Table  4, pg. 588

Feb. 1, 1976-Jan. 31, 1978  7% Table  3, pg. 587

Feb. 1, 1978-Jan. 31, 1980  6% Table  2, pg. 586

Feb. 1, 1980-Jan. 31, 1982 12% Table  5, pg. 588

Feb. 1, 1982-Dec. 31, 1982 20% Table  6, pg. 588

Jan. 1, 1983-Jun. 30, 1983 16% Table 22, pg. 605

Jul. 1, 1983-Dec. 31, 1983 11% Table 17, pg. 600

Jan. 1, 1984-Jun. 30, 1984 11% Table 41, pg. 625

Jul. 1, 1984-Dec. 31, 1984 11% Table 41, pg. 625

Jan. 1, 1985-Jun. 30, 1985 13% Table 19, pg. 602

Jul. 1, 1985-Dec. 31, 1985 11% Table 17, pg. 600

Jan. 1, 1986-Jun. 30, 1986 10% Table 16, pg. 599

Jul. 1, 1986-Dec. 31, 1986  9% Table 15, pg. 598

TABLE OF INTEREST RATES
FROM JAN. 1, 1987 PRESENT

Jan. 1, 1987-Mar. 31, 1987  8% 14 597      9% 15 598

Apr. 1, 1987-Jun. 30, 1987  8% 14 597      9% 15 598

Jul. 1, 1987-Sep. 30, 1987  8% 14 597      9% 15 598

Oct. 1, 1987-Dec. 31, 1987  9% 15 598     10% 16 599

Jan. 1, 1988-Mar. 31, 1988 10% 40 624     11% 41 625

Apr. 1, 1988-Jun. 30, 1988  9% 39 623     10% 40 624

Jul. 1, 1988-Sep. 30, 1988  9% 39 623     10% 40 624

Oct. 1, 1988-Dec. 31, 1988 10% 40 624     11% 41 625

Jan. 1, 1989-Mar. 31, 1989 10% 16 599     11% 17 600

Apr. 1, 1989-Jun. 30, 1989 11% 17 600     12% 18 601

Jul. 1, 1989-Sep. 30, 1989 11% 17 600     12% 18 601

Oct. 1, 1989-Dec. 31, 1989 10% 16 599     11% 17 600

Jan. 1, 1990-Mar. 31, 1990 10% 16 599     11% 17 600

Apr. 1, 1990-Jun. 30, 1990 10% 16 599     11% 17 600

Jul. 1, 1990-Sep. 30, 1990 10% 16 599     11% 17 600

Oct. 1, 1990-Dec. 31, 1990 10% 16 599     l1% 17 600

Jan. 1, 1991-Mar. 31, 1991 10% 16 599     11% 17 600

Apr. 1, 1991-Jun. 30, 1991  9% 15 598     10% 16 599

Jul. 1, 1991-Sep. 30, 1991  9% 15 598     10% 16 599

Oct. 1, 1991-Dec. 31, 1991  9% 15 598     10% 16 599

Jan. 1, 1992-Mar. 31, 1992  8% 38 622      9% 39 623

RATES FOR LARGE CORPORATE UNDERPAYMENTS
FROM JANUARY 1, 1991 PRESENT

Jan. 1, 1991-Mar. 31, 1991  13%   19    602

Apr. 1, 1991-Jun. 30, 1991  12%   18    601

Jul. 1, 1991-Sep. 30, 1991  12%   18    601

Oct. 1, 1991-Dec. 31, 1991  12%   18    601

Jan. 1, 1992-Mar. 31, 1992  11%   41    625

Rev. Rul. 91-65, 1991-2 C.B. 432, 1991-51 I.R.B. 1.