REVENUE RULE 95-46

1995-1 C.B. 217, 1995-26 I.R.B. 6

INTEREST RATES; UNDERPAYMENTS AND OVERPAYMENTS

Released: June 13, 1995
Published: June 26, 1995

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 July 1, 1995, will be 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 corporation overpayment exceeding $10,000 is 6.5 percent.

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, except the rate for 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 for interest computations made after December 31, 1994. Under s 6621(a)(2), the underpayment rate is the sum of the federal short-term rate plus 3 percentage points.

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 applied 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)(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 will use the federal short-term rate based on daily compounding because that rate is most consistent with s 6621 which, pursuant to s 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 April 1995 is 6 percent. Accordingly, an overpayment rate of 8 percent and an underpayment rate of 9 percent are established for the calendar quarter beginning July 1, 1995. The overpayment rate for the portion of corporate overpayments exceeding $10,000 for the calendar quarter beginning July 1, 1995, is 6.5 percent. The underpayment rate for large corporate underpayments for the calendar quarter beginning July 1, 1995, is 11 percent. These rates apply to amounts bearing interest during that calendar quarter.

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. 13, 28, 31, 33, and 37.

Annual interest rates to be compounded daily pursuant to s 6622 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--PERIODS ENDING DEC. 31, 1986
PERIOD RATE IN 1995-9 I.R.B.

       Before Jul. 1, 1975  6% Table  2, pg. 14

Jul. 1, 1975-Jan. 31, 1976  9% Table  4, pg. 16

Feb. 1, 1976-Jan. 31, 1978  7% Table  3, pg. 15

Feb. 1, 1978-Jan. 31, 1980  6% Table  2, pg. 14

Feb. 1, 1980-Jan. 31, 1982 12% Table  5, pg. 16

Feb. 1, 1982-Dec. 31, 1982 20% Table  6, pg. 16

Jan. 1, 1983-Jun. 30, 1983 16% Table 37, pg. 47

Jul. 1, 1983-Dec. 31, 1983 11% Table 27, pg. 37

Jan. 1, 1984-Jun. 30, 1984 11% Table 75, pg. 85

Jul. 1, 1984-Dec. 31, 1984 11% Table 75, pg. 85

Jan. 1, 1985-Jun. 30, 1985 13% Table 31, pg. 41

Jul. 1, 1985-Dec. 31, 1985 11% Table 27, pg. 37

Jan. 1, 1986-Jun. 30, 1986 10% Table 25, pg. 35

Jul. 1, 1986-Dec. 31, 1986  9% Table 23, pg. 33

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

Jan. 1, 1987-Mar. 31, 1987  8% 21 31  9% 23 33

Apr. 1, 1987-Jun. 30, 1987  8% 21 31  9% 23 33

Jul. 1, 1987-Sep. 30, 1987  8% 21 31  9% 23 33

Oct. 1, 1987-Dec. 31, 1987  9% 23 33 10% 25 35

Jan. 1, 1988-Mar. 31, 1988 10% 73 83 11% 75 85

Apr. 1, 1988-Jun. 30, 1988  9% 71 81 10% 73 83

Jul. 1, 1988-Sep. 30, 1988  9% 71 81 10% 73 83

Oct. 1, 1988-Dec. 31, 1988 10% 73 83 11% 75 85

Jan. 1, 1989-Mar. 31, 1989 10% 25 35 11% 27 37

Apr. 1, 1989-Jun. 30, 1989 11% 27 37 12% 29 39

Jul. 1, 1989-Sep. 30, 1989 11% 27 37 12% 29 39

Oct. 1, 1989-Dec. 31, 1989 10% 25 35 11% 27 37

Jan. 1, 1990-Mar. 31, 1990 10% 25 35 11% 27 37

Apr. 1, 1990-Jun. 30, 1990 10% 25 35 11% 27 37

Jul. 1, 1990-Sep. 30, 1990 10% 25 35 11% 27 37

Oct. 1, 1990-Dec. 31, 1990 10% 25 35 11% 27 37

Jan. 1, 1991-Mar. 31, 1991 10% 25 35 11% 27 37

Apr. 1, 1991-Jun. 30, 1991  9% 23 33 10% 25 35

Jul. 1, 1991-Sep. 30, 1991  9% 23 33 10% 25 35

Oct. 1, 1991-Dec. 31, 1991  9% 23 33 10% 25 35

Jan. 1, 1992-Mar. 31, 1992  8% 69 79  9% 71 81

Apr. 1, 1992-Jun. 30, 1992  7% 67 77  8% 69 79

Jul. 1, 1992-Sep. 30, 1992  7% 67 77  8% 69 79

Oct. 1, 1992-Dec. 31, 1992  6% 65 75  7% 67 77

Jan. 1, 1993-Mar. 31, 1993  6% 17 27  7% 19 29

Apr. 1, 1993-Jun. 30, 1993  6% 17 27  7% 19 29

Jul. 1, 1993-Sep. 30, 1993  6% 17 27  7% 19 29

Oct. 1, 1993-Dec. 31, 1993  6% 17 27  7% 19 29

Jan. 1, 1994-Mar. 31, 1994  6% 17 27  7% 19 29

Apr. 1, 1994-Jun. 30, 1994  6% 17 27  7% 19 29

Jul. 1, 1994-Sep. 30, 1994  7% 19 29  8% 21 31

Oct. 1, 1994-Dec. 31, 1994  8% 21 31  9% 23 33

Jan. 1, 1995-Mar. 31, 1995  8% 21 31  9% 23 33

Apr. 1, 1995-Jun. 30, 1995  9% 23 33 10% 25 35

Jul. 1, 1995-Sep. 30, 1995  8% 21 31  9% 23 33

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

Jan. 1, 1991-Mar. 31, 1991 13% 31 41

Apr. 1, 1991-Jun. 30, 1991 12% 29 39

Jul. 1, 1991-Sep. 30, 1991 12% 29 39

Oct. 1, 1991-Dec. 31, 1991 12% 29 39

Jan. 1, 1992-Mar. 31, 1992 11% 75 85

Apr. 1, 1992-Jun. 30, 1992 10% 73 83

Jul. 1, 1992-Sep. 30, 1992 10% 73 83

Oct. 1, 1992-Dec. 31, 1992  9% 71 81

Jan. 1, 1993-Mar. 31, 1993  9% 23 33

Apr. 1, 1993-Jun. 30, 1993  9% 23 33

Jul. 1, 1993-Sep. 30, 1993  9% 23 33

Oct. 1, 1993-Dec. 31, 1993  9% 23 33

Jan. 1, 1994-Mar. 31, 1994  9% 23 33

Apr. 1, 1994-Jun. 30, 1994  9% 23 33

Jul. 1, 1994-Sep. 30, 1994 10% 25 35

Oct. 1, 1994-Dec. 31, 1994 11% 27 37

Jan. 1, 1995-Mar. 31, 1995 11% 27 37

Apr. 1, 1995-Jun. 30, 1995 12% 29 39

Jul. 1, 1995-Sep. 30, 1995 11% 27 37

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

Jan. 1, 1995-Mar. 31, 1995 6.5% 18 28

Apr. 1, 1995-Jun. 30, 1995 7.5% 20 30

Jul. 1, 1995-Sep. 30, 1995 6.5% 18 28

Rev. Rul. 95-46, 1995-1 C.B. 217, 1995-26 I.R.B. 6