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INTEREST RATES TO INCREASE FOR THIRD QUARTER.

MAY 28, 1996

Rev. Rul. 96-28; 1996-1 C.B. 326

DATED MAY 28, 1996
DOCUMENT ATTRIBUTES
  • Institutional Authors
    Internal Revenue Service
  • Cross-Reference

    IR-96-29

    Part I

    Section 6621. -- Determination of Interest Rate

    26 CFR 301.6621-1: Interest rate.

  • Code Sections
  • Subject Area/Tax Topics
  • Index Terms
    interest, rates
    interest, rates, large corporate underpayments
  • Jurisdictions
  • Language
    English
  • Tax Analysts Document Number
    Doc 96-15831 (7 original pages)
  • Tax Analysts Electronic Citation
    96 TNT 105-6
Citations: Rev. Rul. 96-28; 1996-1 C.B. 326

Rev. Rul. 96-28

Section 6621 of the Internal Revenue Code establishes different rates for interest on tax overpayments and interest on tax underpayments. Under 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 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 rate. 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)(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 April 1996 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, 1996. The overpayment rate for the portion of corporate overpayments exceeding $10,000 for the calendar quarter beginning July 1, 1996, is 6.5 percent. The underpayment rate for large corporate underpayments for the calendar quarter beginning July 1, 1996, 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 66, 69, 71, and 75 of Rev. Proc. 95-17, 1995-1 C.B. 556, 620, 623, 625, and 629.

Annual interest rates to be compounded daily pursuant to 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

 

 

                 OVERPAYMENTS AND UNDERPAYMENTS

 

 

 PERIOD                        RATE           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 - PRESENT

 

 

                                   OVERPAYMENTS          UNDERPAYMENTS

 

                                  RATE TABLE PG          RATE TABLE PG

 

                                    1995-1 C.B.            1995-1 C.B.

 

 

 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

 

 

                      TABLE OF INTEREST RATES FOR

 

                     LARGE CORPORATE UNDERPAYMENTS

 

 

                    FROM JANUARY 1, 1991 - PRESENT

 

 

                                               RATE TABLE   PG

 

                                                 1995-1 C.B.

 

 

 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

 

 

                 TABLE OF INTEREST RATES FOR CORPORATE

 

                    OVERPAYMENTS EXCEEDING $10,000

 

 

                    FROM JANUARY 1, 1995 - PRESENT

 

 

                                               RATE TABLE   PG

 

                                                 1995-1  C.B.

 

 

 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
DOCUMENT ATTRIBUTES
  • Institutional Authors
    Internal Revenue Service
  • Cross-Reference

    IR-96-29

    Part I

    Section 6621. -- Determination of Interest Rate

    26 CFR 301.6621-1: Interest rate.

  • Code Sections
  • Subject Area/Tax Topics
  • Index Terms
    interest, rates
    interest, rates, large corporate underpayments
  • Jurisdictions
  • Language
    English
  • Tax Analysts Document Number
    Doc 96-15831 (7 original pages)
  • Tax Analysts Electronic Citation
    96 TNT 105-6
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