IRS announces drop in interest rates

The Internal Revenue Service has announced that interest rates for the calendar quarter beginning July 1, 2008, will drop by one percentage point. The new rates will be:

  • Five percent for overpayments [four percent in the case of a corporation];

  • Five percent for underpayments;

  • Seven percent for large corporate underpayments; and

  • Two and one-half (2.5) 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.

    These interest rates are computed from the federal short-term rate based on daily compounding determined during April 2008.

    Revenue Ruling 2008-27, announcing the new rates of interest, will appear in Internal Revenue Bulletin No. 2008-26, dated June 30, 2008.

    You may like these other stories...

    Savvy tax planning is about more than knowing what to write off. Just as essential is knowing when to take deductions. Choosing to stuff deductions into one tax year as opposed to another bears directly on how much winds up...
    Tesco says it overstated profit forecastStanley Reed of the New York Times reported that Tesco, the large British grocery retailer, disclosed on Monday that it had overstated its expected half-year profit by about $400...
    The IRS has announced the special per diem rates for 2014-15 that taxpayers can use for substantiating the amount of ordinary and necessary business expenses incurred while traveling away from home. The new per diem rates...

    Already a member? log in here.

    Upcoming CPE Webinars

    Sep 24
    In this jam-packed presentation Excel expert David Ringstrom, CPA will give you a crash-course in creating spreadsheet-based dashboards. A dashboard condenses large amounts of data into a compact space, yet enables the end user to easily drill down into details when warranted.
    Sep 30
    This webcast will include discussions of important issues in SSARS No. 19 and the current status of proposed changes by the Accounting and Review Services Committee in these statements.
    Oct 21
    Kristen Rampe will share how to speak and write more effectively by understanding your own and your audience's communication style.
    Oct 23
    Amber Setter will show the value of leadership assessments as tools for individual and organizational leadership development initiatives.