The IRS announced that interest rates on tax overpayments and underpayments will drop by one percentage point for the quarter starting April 1 (Rev. Rul. 2009-7).
IRC § 6621 establishes the interest rates on tax overpayments and underpayments. The rates are based on the federal short-term rate (most recently published in Rev. Rul. 2009-5).
Starting April 1, the new interest rates on overpayments will be:
- 3% for corporate overpayments (1.5% for the portion of a corporate overpayment exceeding $10,000);
- 4% for other overpayments (section 6621(a)(1)).
The new interest rates on underpayments will be:
- 6% for large (over $100,000) corporate underpayments (section 6621(c));
- 4% for other underpayments (section 6621(a)(2)).