REVENUE RULE 95-15

1995-9 I.R.B. 9, 1995-1 C.B. 212

INTEREST RATES; UNDERPAYMENTS AND OVERPAYMENTS

February 8, 1995

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, 1995, is 8 percent for overpayments, 9 percent for underpayments, and 11 percent for large corporate underpayments. The rate of interest paid on the portion of a corporate overpayment exceeding $10,000 is 6.5 percent. Rev. Rul. 94-78 modified and superseded.

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

Section 713 of the Uruguay Round Agreements Act, P. L. 103-465, implementing the Uruguay Round of General Agreement on Tariffs and Trade (GATT), amended s 6621(a)(1) to provide that the interest paid on the portion of a corporate overpayment of tax exceeding $10,000 for a taxable period is the sum of the federal short-term rate plus 0.5 of a percentage point. Section 6621(a)(1), as amended, applies for purposes of determining interest for periods after December 31, 1994.

Section 6621(c) provides that for purposes of interest payable under s 6601 on any large corporate underpayment, the underpayment rate under s 6621(a)(2) shall be determined by substituting "5 percentage points" for "3 percentage points." See s 6621(c) and s 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 rate. Section 6621(c) and s 301.6621-3 are generally effective for periods after December 31, 1990.

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

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

Section 6621(b)(2)(B) provides that in determining the addition to tax under s 6654 for failure to pay 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.

Section 6621(b)(3) 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 s 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 s 6621, the Internal Revenue Service, consistent with s 6622, will use the federal short-term rate based on daily compounding.

Rounded to the nearest full percent, the federal short-term rate based on daily compounding determined during the month of October 1994 is 6 percent. Accordingly, an overpayment rate of 8 percent and an underpayment rate of 9 percent are established for the calendar quarter beginning January 1, 1995. The overpayment rate for the portion of corporate overpayments exceeding $10,000 for the calendar quarter beginning January 1, 1995, is 6.5 percent. The underpayment rate for large corporate underpayments for the calendar quarter beginning January 1, 1995, is 11 percent. These rates apply to amounts bearing interest during that calendar quarter.

The 9 percent rate also applies to estimated tax underpayments for the first calendar quarter in 1995 and for the first 15 days in April 1995.

Interest factors for daily compound interest for annual rates of 6.5 percent, 8 percent, 9 percent, and 11 percent are published in Tables 18, 21, 23, and 27 of Rev. Proc. 95-17, 1995-9 I.R.B. xx, in this Bulletin, which supersedes Rev. Proc. 83-7, 1983-1 C.B. 583, for interest computations made after December 31, 1994.

Annual interest rates to be compounded daily pursuant to s 6622 that apply for prior periods are set forth in the tables accompanying this revenue ruling.

EFFECT ON OTHER DOCUMENTS

This revenue ruling modifies and supersedes Rev. Rul. 94-78, 1994-51 I.R.B. 4.

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, 1995 - PERIODS ENDING DEC. 31, 1986
PERIOD RATE DAILY RATE TABLE IN 1995-9 I.R.B.

       Before Jul. 1, 1975  6% Table  2, pg.   557

Jul. 1, 1975-Jan. 31, 1976  9% Table  4, pg.   559

Feb. 1, 1976-Jan. 31, 1978  7% Table  3, pg.   558

Feb. 1, 1978-Jan. 31, 1980  6% Table  2, pg.   557

Feb. 1, 1980-Jan. 31, 1982 12% Table  5, pg.   560

Feb. 1, 1982-Dec. 31, 1982 20% Table  6, pg.   560

Jan. 1, 1983-Jun. 30, 1983 16% Table 37, pg.   591

Jul. 1, 1983-Dec. 31, 1983 11% Table 27, pg.   581

Jan. 1, 1984-Jun. 30, 1984 11% Table 75, pg.   629

Jul. 1, 1984-Dec. 31, 1984 11% Table 75, pg.   629

Jan. 1, 1985-Jun. 30, 1985 13% Table 31, pg.   585

Jul. 1, 1985-Dec. 31, 1985 11% Table 27, pg.   581

Jan. 1, 1986-Jun. 30, 1986 10% Table 25, pg.   579

Jul. 1, 1986-Dec. 31, 1986  9% Table 23, pg.   577

TABLE OF INTEREST RATES FROM JAN. 1, 1987 - PRESENT
RATE TABLE IN 1995-9 I.R.B. PG

Jan. 1, 1987-Mar. 31, 1987  8% 21 575    9% 23   577

Apr. 1, 1987-Jun. 30, 1987  8% 21 575    9% 23   577

Jul. 1, 1987-Sep. 30, 1987  8% 21 575    9% 23   577

Oct. 1, 1987-Dec. 31, 1987  9% 23 577   10% 25   579

Jan. 1, 1988-Mar. 31, 1988 10% 73 627   11% 75   629

Apr. 1, 1988-Jun. 30, 1988  9% 71 625   10% 73   627

Jul. 1, 1988-Sep. 30, 1988  9% 71 625   10% 73   627

Oct. 1, 1988-Dec. 31, 1988 10% 73 627   11% 75   629

Jan. 1, 1989-Mar. 31, 1989 10% 25 579   11% 27   581

Apr. 1, 1989-Jun. 30, 1989 11% 27 581   12% 29   583

Jul. 1, 1989-Sep. 30, 1989 11% 27 581   12% 29   583

Oct. 1, 1989-Dec. 31, 1989 10% 25 579   11% 27   581

Jan. 1, 1990-Mar. 31, 1990 10% 25 579   11% 27   581

Apr. 1, 1990-Jun. 30, 1990 10% 25 579   11% 27   581

Jul. 1, 1990-Sep. 30, 1990 10% 25 579   11% 27   581

Oct. 1, 1990-Dec. 31, 1990 10% 25 579   11% 27   581

Jan. 1, 1991-Mar. 31, 1991 10% 25 579   11% 27   581

Apr. 1, 1991-Jun. 30, 1991  9% 23 577   10% 25   579

Jul. 1, 1991-Sep. 30, 1991  9% 23 577   10% 25   579

Oct. 1, 1991-Dec. 31, 1991  9% 23 577   10% 25   579

Jan. 1, 1992-Mar. 31, 1992  8% 69 623    9% 71   625

Apr. 1, 1992-Jun. 30, 1992  7% 67 621    8% 69   623

Jul. 1, 1992-Sep. 30, 1992  7% 67 621    8% 69   623

Oct. 1, 1992-Dec. 31, 1992  6% 65 619    7% 67   621

Jan. 1, 1993-Mar. 31, 1993  6% 17 571    7% 19   573

Apr. 1, 1993-Jun. 30, 1993  6% 17 571    7% 19   573

Jul. 1, 1993-Sep. 30, 1993  6% 17 571    7% 19   573

Oct. 1, 1993-Dec. 31, 1993  6% 17 571    7% 19   573

Jan. 1, 1994-Mar. 31, 1994  6% 17 571    7% 19   573

Apr. 1, 1994-Jun. 30, 1994  6% 17 571    7% 19   573

Jul. 1, 1994-Sep. 30, 1994  7% 19 573    8% 21   575

Oct. 1, 1994-Dec. 31, 1994  8% 21 575    9% 23   577

Jan. 1, 1995-Mar. 31, 1995  8% 21 575    9% 23   577

TABLE OF INTEREST RATES FOR LARGE CORPORATE UNDERPAYMENTS
FROM JANUARY 1, 1991 - PRESENT
RATE TABLE IN 1995-9 I.R.B. PG

Jan. 1, 1991-Mar. 31, 1991 13% 31   585

Apr. 1, 1991-Jun. 30, 1991 12% 29   583

Jul. 1, 1991-Sep. 30, 1991 12% 29   583

Oct. 1, 1991-Dec. 31, 1991 12% 29   583

Jan. 1, 1992-Mar. 31, 1992 11% 75   629

Apr. 1, 1992-Jun. 30, 1992 10% 73   627

Jul. 1, 1992-Sep. 30, 1992 10% 73   627

Oct. 1, 1992-Dec. 31, 1992  9% 71   625

Jan. 1, 1993-Mar. 31, 1993  9% 23   577

Apr. 1, 1993-Jun. 30, 1993  9% 23   577

Jul. 1, 1993-Sep. 30, 1993  9% 23   577

Oct. 1, 1993-Dec. 31, 1993  9% 23   577

Jan. 1, 1994-Mar. 31, 1994  9% 23   577

Apr. 1, 1994-Jun. 30, 1994  9% 23   577

Jul. 1, 1994-Sep. 30, 1994 10% 25   579

Oct. 1, 1994-Dec. 31, 1994 11% 27   581

Jan. 1, 1995-Mar. 31, 1995 11% 27   581

TABLE OF INTEREST RATES FOR CORPORATE
OVERPAYMENTS EXCEEDING $10,000 FROM JANUARY 1, 1995 - PRESENT
RATE TABLE IN 1995-9 I.R.B. PG

Jan. 1, 1995-Mar. 31, 1995 6.5% 18   572

Rev. Rul. 95-15, 1995-9 I.R.B. 9, 1995-1 C.B. 212.