Rev. Rul. 99-16, 1999-13 I.R.B. 5.

                       Internal Revenue Service
                                 Revenue Ruling

                 INTEREST RATES; UNDERPAYMENTS AND OVERPAYMENTS

                            Released: March 15, 1999
                           Published: March 29, 1999

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 April 1, 1999, will be 8 percent for overpayments (7 percent in the case of a corporation), 8 percent for underpayments, and 10 percent for large corporate underpayments. The rate of interest paid on the portion of a corporate overpayment exceeding $10,000 is 5.5 percent.

  Interest rates; underpayments and overpayments. The rate of interest determined under section 6621 of the Code for the calendar quarter beginning April 1, 1999, will be 8 percent for overpayments (7 percent in the case of a corporation), 8 percent for underpayments, and 10 percent for large corporate underpayments. The rate of interest paid on the portion of a corporate overpayment exceeding $10,000 is 5.5 percent.

  Section 6621 of the Internal Revenue Code establishes the rates for interest on tax overpayments and tax underpayments. Under § 6621(a)(1), the overpayment rate beginning April 1, 1999, is the sum of the federal short-term rate plus 3 percentage points (2 percentage points in the case of a corporation), 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 § 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 § 6601 on any large corporate underpayment, the underpayment rate under § 6621(a)(2) is determined 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. Section 6621(c) and § 301.6621-3 are generally effective for periods after December 31, 1990.

  Section 6621(b)(1) provides that the Secretary will 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 § 6621(b)(1) for any month applies during the first calendar quarter beginning after such month.

  Section 6621(b)(2)(B) provides that in determining the addition to tax under § 6654 for failure to pay estimated tax for any taxable year, the federal short-term rate that applies during the third month following such taxable year also applies 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 is 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 is 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, 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 1999 is 5 percent. Accordingly, an overpayment rate of 8 percent (7 percent in the case of a corporation) and an underpayment rate of 8 percent are established for the calendar quarter beginning April 1, 1999. The overpayment rate for the portion of a corporate overpayment exceeding $10,000 for the calendar quarter beginning April 1, 1999, is 5.5 percent. The underpayment rate for large corporate underpayments for the calendar quarter beginning April 1, 1999, is 10 percent. These rates apply to amounts bearing interest during that calendar quarter.

  Under § 6621(b)(2)(B), the 7 percent rate that applies to estimated tax underpayments for the first calendar quarter in 1999, as provided in Rev. Rul. 98-61, 1998-51 I.R.B. 8, also applies to such underpayments for the first 15 days in April 1999.

  Interest factors for daily compound interest for annual rates of 5.5 percent, 7 percent, 8 percent, and 10 percent are published in Tables 16, 19, 21, and 25 of Rev. Proc. 95-17, 1995-1 C.B. 556, 570, 573, 575, and 579.

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

INFORMATION

  The principal author of this revenue ruling is Raymond Bailey of the Office of Assistant Chief Counsel (Income Tax and Accounting). For further information regarding this revenue ruling, contact Mr. Bailey on (202) 622-6226 (not a toll-free call).

                     TABLE OF INTEREST RATES
   PERIODS BEFORE JUL. 1, 1975 - PERIODS ENDING DEC. 31, 1986
                 OVERPAYMENTS AND UNDERPAYMENTS
PERIOD                       RATE  In 1995-1 C.B DAILY RATE TABLE
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 - Dec. 31, 1998
                                   OVERPAYMENTS             UNDERPAYMENTS
                             RATE   1995-1 C.B.    PG  RATE   1995-1 C.B.    PG
                                       TABLE                     TABLE
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
Apr. 1, 1995--Jun. 30, 1995    9%             23  577   10%             25  579
Jul. 1, 1995--Sep. 30, 1995    8%             21  575    9%             23  577
Oct. 1, 1995--Dec. 31, 1995    8%             21  575    9%             23  577
Jan. 1, 1996--Mar. 31, 1996    8%             69  623    9%             71  625
Apr. 1, 1996--Jun. 30, 1996    7%             67  621    8%             69  623
Jul. 1, 1996--Sep. 30, 1996    8%             69  623    9%             71  625
Oct. 1, 1996--Dec. 31, 1996    8%             69  623    9%             71  625
Jan. 1, 1997--Mar. 31, 1997    8%             21  575    9%             23  577
Apr. 1, 1997--Jun. 30, 1997    8%             21  575    9%             23  577
Jul. 1, 1997--Sep. 30, 1997    8%             21  575    9%             23  577
Oct. 1, 1997--Dec. 31, 1997    8%             21  575    9%             23  577
Jan. 1, 1998--Mar. 31, 1998    8%             21  575    9%             23  577
Apr. 1, 1998--Jun. 30, 1998    7%             19  573    8%             21  575
Jul. 1, 1998--Sep. 30, 1998    7%             19  573    8%             21  575
Oct. 1, 1998--Dec. 31, 1998    7%             19  573    8%             21  575

                 TABLE OF INTEREST RATES
              FROM JANUARY 1, 1999 - PRESENT
       NONCORPORATE OVERPAYMENTS AND UNDERPAYMENTS
                             RATE  1995-1 C.B. TABLE  PAGE
Jan. 1, 1999--Mar. 31, 1999   7%          19          573
Apr. 1, 1999--Jun. 30, 1999   8%          21          575

                            TABLE OF INTEREST RATES
                        FROM JANUARY 1, 1999 - PRESENT
                   CORPORATE OVERPAYMENTS AND UNDERPAYMENTS
                                OVERPAYMENTS               UNDERPAYMENTS
                          RATE   1995-1 C.B.    PG   RATE    1995-1 C.B.    PG
                                    TABLE                       TABLE
Jan. 1, 1999--Mar. 31,    6%         17        571   7%         19         573
          1999
Apr. 1, 1999--Jun. 30,    7%         19        573   8%         21         575
          1999

               TABLE OF INTEREST RATES FOR
              LARGE CORPORATE UNDERPAYMENTS
             FROM JANUARY 1, 1991 - PRESENT
                             RATE  1995-1 C.B. TABLE  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
Apr. 1, 1995--Jun. 30, 1995   12%                 29  583
Jul. 1, 1995--Sep. 30, 1995   11%                 27  581
Oct. 1, 1995--Dec. 31, 1995   11%                 27  581
Jan. 1, 1996--Mar. 31, 1996   11%                 75  629
Apr. 1, 1996--Jun. 30, 1996   10%                 73  627
Jul. 1, 1996--Sep. 30, 1996   11%                 75  629
Oct. 1, 1996--Dec. 31, 1996   11%                 75  629
Jan. 1, 1997--Mar. 31, 1997   11%                 27  581
Apr. 1, 1997--Jun. 30, 1997   11%                 27  581
Jul. 1, 1997--Sep. 30, 1997   11%                 27  581
Oct. 1, 1997--Dec. 31, 1997   11%                 27  581
Jan. 1, 1998--Mar. 31, 1998   11%                 27  581
Apr. 1, 1998--Jun. 30, 1998   10%                 25  579
Jul. 1, 1998--Sep. 30, 1998   10%                 25  579
Oct. 1, 1998--Dec. 31, 1998   10%                 25  579
Jan. 1, 1999--Mar. 31, 1999    9%                 23  577
Apr. 1, 1999--Jun. 30, 1999   10%                 25  579

   TABLE OF INTEREST RATES FOR CORPORATE OVERPAYMENTS EXCEEDING $10,000
                      FROM JANUARY 1, 1995 - PRESENT
                                 RATE      1995-1 C.B. TABLE            PG
Jan. 1, 1995--Mar. 31, 1995          6.5%                 18           572
Apr. 1, 1995--Jun. 30, 1995          7.5%                 20           574
Jul. 1, 1995--Sep. 30, 1995          6.5%                 18           572
Oct. 1, 1995--Dec. 31, 1995          6.5%                 18           572
Jan. 1, 1996--Mar. 31, 1996          6.5%                 66           620
Apr. 1, 1996--Jun. 30, 1996          5.5%                 64           618
Jul. 1, 1996--Sep. 30, 1996          6.5%                 66           620
Oct. 1, 1996--Dec. 31, 1996          6.5%                 66           620
Jan. 1, 1997--Mar. 31, 1997          6.5%                 18           572
Apr. 1, 1997--Jun. 30, 1997          6.5%                 18           572
Jul. 1, 1997--Sep. 30, 1997          6.5%                 18           572
Oct. 1, 1997--Dec. 31, 1997          6.5%                 18           572
Jan. 1, 1998--Mar. 31, 1998          6.5%                 18           572
Apr. 1, 1998--Jun. 30, 1998          5.5%                 16           570
Jul. 1, 1998--Sep. 30, 1998          5.5%                 16           570
Oct. 1, 1998--Dec. 31, 1998          5.5%                 16           570
Jan. 1, 1999--Mar. 31, 1999          4.5%                 14           568
Apr. 1, 1999--Jun. 30, 1999          5.5%                 16           570

Rev. Rul. 99-16, 1999-13 I.R.B. 5.