REVENUE RULE 92-77

1992-2 C.B. 309, 1992-38 I.R.B. 12.

Internal Revenue Service
Revenue Ruling

INTEREST RATES; UNDERPAYMENTS AND OVERPAYMENTS

Published: September 21, 1992

Section 6621. Determination of Rate of Interest, 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 October 1, 1992, will be 6 percent for overpayments, 7 percent for underpayments, and 9 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 federal short- term rate plus 2 percentage points. Under section 6621 (a) (2), the underpayment rate is the sum of the federal short-term rate plus 3 percentage points.

Section 6621(c) of the Code, as added by the Revenue Reconciliation Act of 1990, Pub. L. 101-508, section 11341(a)(2), 104 Stat. 1388 (1990), provides that for purposes of interest payable under section 6601 on any large corporate underpayment, the underpayment rate under section 6621(a)(2) shall be applied by substituting 115 percentage points" for 113 percentage points.11 See section 6621(c) and section 301.6621-3T of the Temporary 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 301.6621-3T are generally effective for periods after December 31, 1990.

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)(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 July 1992 is 4 percent. Accordingly, an overpayment rate of 6 percent and an underpayment rate of 7 percent are established for the calendar quarter beginning October 1, 1992. The underpayment rate for large corporate underpayments for the calendar quarter beginning October 1, 1992, is 9 percent. These rates apply to amounts bearing interest during that calendar quarter.

Interest factors for daily compound interest for annual rates of 6 percent, 7 percent and 9 percent were published in Tables 36, 37 and 39 of Rev. Proc. 83- 7, 1983-1 C.B. 583, 620, 621, and 623.

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 Assistant Chief Counsel (Income Tax and Accounting) . For further information regarding this revenue ruling, contact Ms. Rachy on (202) 622-6232 (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

Jul. 1, 1975 to Jan. 31, 1976  9% Table  4, pg. 588

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

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

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

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

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

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

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

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

Jan. 11 1985 to Jun. 30, 1985 13% Table 19, pg. 602

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

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

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

TABLE OF INTEREST RATES
FROM JAN. 1, 1987 - PRESENT

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Oct. 1, 1990 to Dec. 31, 1990 10% 16 599 11% 17 600

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

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

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

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

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

Apr. 1, 1992 to Jun. 30, 1992  7% 37 621  8% 38 622

Jul. 1, 1992 to Sep. 30, 1992  7% 37 621  8% 38 622

Oct. 1, 1992 to Dec. 31, 1992  6% 36 620  7% 37 621

RATES FOR LARGE CORPORATE UNDERPAYMENTS
FROM JANUARY 1, 1991 - PRESENT

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

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

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

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

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

Apr. 1, 1992 to Jun. 30, 1992 10% 40 624

Jul. 1, 1992 to Sep. 30, 1992 10% 40 624

Oct. 1, 1992 to Dec. 31, 1992  9% 39 623

Rev. Rul. 92-77, 1992-2 C.B. 309, 1992-38 I.R.B. 12.