IR-2011-85: Interest Rates Decrease for the Fourth Quarter of 2011
 
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Sent: Thursday, August 18, 2011 10:47 AM
Subject: IR-2011-85: Interest Rates Decrease for the Fourth Quarter of 2011

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IRS Newswire August 18, 2011

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Issue Number:    IR-2011-85

Inside This Issue


Interest Rates Decrease for the Fourth Quarter of 2011

WASHINGTON – The Internal Revenue Service today announced that interest rates will decrease for the calendar quarter beginning Oct. 1, 2011.  The rates will be: 

  • three (3) percent for overpayments [two (2) percent in the case of a corporation];
  • three (3) percent for underpayments;
  • five (5) percent for large corporate underpayments; and
  • zero and one-half (0.5) percent for the portion of a corporate overpayment exceeding $10,000.

Under the Internal Revenue Code, the rate of interest is determined on a quarterly basis.  For taxpayers other than corporations, the overpayment and underpayment rate is the federal short-term rate plus 3 percentage points.  Generally, in the case of a corporation, the underpayment rate is the federal short-term rate plus 3 percentage points and the overpayment rate is the federal short-term rate plus 2 percentage points. 

The rate for large corporate underpayments is the federal short-term rate plus 5 percentage points.  The rate on the portion of a corporate overpayment of tax exceeding $10,000 for a taxable period is the federal short-term rate plus one-half (0.5) of a percentage point.

The interest rates announced today are computed from the federal short-term rate during July 2011 to take effect Aug. 1, 2011, based on daily compounding.

Revenue Ruling 2011-18, announcing the rates of interest, is attached and will appear in Internal Revenue Bulletin No. 2011-39, dated Sept. 26, 2011. 

 

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