REVENUE RULE 95-59

1995-2 C.B. 266, 1995-35 I.R.B. 10

INTEREST RATES; UNDERPAYMENTS AND OVERPAYMENTS

Released: August 9, 1995
Published: August 28, 1995

§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, 1995, will remain at 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 will remain at 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 July 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 October 1, 1995. The overpayment rate for the portion of corporate overpayments exceeding $10,000 for the calendar quarter beginning October 1, 1995, is 6.5 percent. The underpayment rate for large corporate underpayments for the calendar quarter beginning October 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 TO PERIODS ENDING DEC. 31, 1986
PERIOD RATE DAILY RATE TABLE 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 TO PRESENT
1995-9 I.R.B.

Jan. 1, 1987 to Mar. 31, 1987  8% 221 31  9% 23 33

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Oct. 1, 1995 to Dec. 31, 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 to Mar. 31, 1991 13% 31 41

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

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

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

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

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

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

Oct. 1, 1992 to Dec. 31, 1992  9% 71 81

Jan. 1, 1993 to Mar. 31, 1993  9% 23 33

Apr. 1, 1993 to Jun. 30, 1993  9% 23 33

Jul. 1, 1993 to Sep. 30, 1993  9% 23 33

Oct. 1, 1993 to Dec. 31, 1993  9% 23 33

Jan. 1, 1994 to Mar. 31, 1994  9% 23 33

Apr. 1, 1994 to Jun. 30, 1994  9% 23 33

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

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

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

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

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

Oct. 1, 1995 to Dec. 31, 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 to Mar. 31, 1995 6.5% 18 28

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

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

Oct. 1, 1995 to Dec. 31, 1995 6.5% 18 28