REVENUE RULE 93-24

1993-1 C.B. 215, 1993-14 I.R.B. 5.

Internal Revenue Service
Revenue Ruling

INTEREST RATES; UNDERPAYMENTS AND OVERPAYMENTS

Published: March 19, 1993

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

Interest rates; underpayments and overpayments. The rate of interest determined under § 6621 of the Code for the calendar quarter beginning April 1. 1993, will be 6 percent for overpayments, 7 percent for underpayments, and 9 percent or large corporate underpayments.

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

§ 6621(c) of the Code provides that for purposes of interest payable under § 6601 on any large corporate underpayment, the underpayment rate under § 6621(a)(2) shall be applied by substituting "5 percentage points" for "3 percentage points." See § 6621(c) and § 301.6621-3 of the Regulations on Procedure and Administration for the definition of a large corporate underpayment and for the rules for determining the applicable date. § 6621(c) and § 301.6621-3 are generally effective for periods after December 31, 1990.

§ 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.

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

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

§ 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 § 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 § 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 § 6621 which, pursuant to § 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, January 1993, is 4 percent. Accordingly, an overpayment rate of 6 percent and an underpayment rate of 7 percent are established for the calendar quarter beginning April 1, 1993. The underpayment rate for large corporate underpayments for the calendar quarter beginning April 1, 1993, is 9 percent. These rates apply to amounts bearing interest during that calendar quarter.

In addition, pursuant to § 6621(b)(2)(B) of the Code, the rate applicable to underpayments for the calendar quarter beginning January 1, 1993, continues to be applicable to individual estimated tax underpayments from April 1, 1993, through April 15, 1993. The underpayment rate for the calendar quarter beginning January 1, 1993, is 7 percent. Therefore, the rate applicable to individual estimated tax underpayments is 7 percent from April 1, 1993, through April 15, 1993, and 7 percent from April 16, 1993 through June 30, 1993.

Interest factors for daily compound interest for annual rates of 6 percent, 7 percent and 9 percent were published in Tables 12, 13, and 15 of Rev. Proc. 83- 7, 1983-1 C.B. 583, 595, 596, and 598.

Annual interest rates to be compounded daily pursuant to § 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) 622-4940 (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. 1, 1985 to Jun. 30, 1985 13% Table 19, pg. 602

Jul. 1, 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 10% 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

Jan. 1, 1993 to Mar. 31, 1993  6% 12 595  7% 13 596

Apr. 1, 1993 to Jun. 30, 1993  6% 12 595  7% 13 596

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% 39 620

Jan. 1, 1993 to Mar. 31, 1993  9% 15 596

Apr. 1, 1993 to Jun. 30, 1993  9% 15 598

1993-1 C.B. 215, 1993-14 I.R.B. 5.