Tax Lawyers Minneapolis | IRS Increases Interest Rates for the Second Quarter of 2011
The Internal Revenue Service announced that the interest rates for the calendar quarter beginning April 1, 2011, will increase by one percentage point. 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. With respect to corporations, 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.
Hence, the rates will be as follows:
Overpayment
3% – for corporations
4% – individuals
1.5% for the portion of corporate overpayment exceeding $10,000.
Underpayment
4% generally
6% for large corporate underpayments