IRS Revenue Ruling
1997-12

  Code Sec. 6621



<<FULL TEXT>>

26 CFR 301.6621-1: Interest rate. Interest rates; underpayments and
overpayments. The rate of interest determined under section 6621 of the
Code for the calendar quarter beginning April 1, 1997, will be 8 percent
for overpayments, 9 percent for underpayments, and 11 percent for large
corporate underpayments. The rate of interest paid on the portion of a
corporate overpayment exceeding $10,000 is 6.5 percent.


REV. RUL. 97-12

Section 6621 of the Internal Revenue Code establishes different rates
for interest on tax overpayments and interest on tax underpayments. Under
section 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 section
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
section 6601 on any large corporate underpayment, the underpayment rate
under section 6621(a)(2) is determined by substituting "5 percentage
points" for "3 percentage points." See section 6621(c) and section
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 section 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 section 6621(b)(1) for any month applies during the first
calendar quarter beginning after such month.

Section 6621(b)(2)(B) provides that in determining the addition to tax
under section 6654 for failure to pay individual estimated tax for any
taxable year, the federal short-term rate that applies during the third
month following such taxable year also applies during the first 15 days of
the fourth month following such taxable year.

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 section 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 section 6621, the Internal Revenue Service will use the federal
short-term rate based on daily compounding because that rate is most
consistent with section 6621 which, pursuant to section 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 January 1997 is 6
percent. Accordingly, an overpayment rate of 8 percent and an underpayment
rate of 9 percent are established for the calendar quarter beginning April
1, 1997. The overpayment rate for the portion of corporate overpayments
exceeding $10,000 for the calendar quarter beginning April 1, 1997, is 6.5
percent. The underpayment rate for large corporate underpayments for the
calendar quarter beginning April 1, 1997, is 11 percent. These rates apply
to amounts bearing interest during that calendar quarter.

Under section 6621(b)(2)(B), the 9 percent rate that applies to
individual estimated tax underpayments for the first calendar quarter in
1997, as provided in Rev. Rul. 96-61, 1996-52 I.R.B. 24, also applies to
such underpayments for the first 15 days in April 1997.

Interest factors for daily compound interest for annual rates of 6.5
percent, 8 percent, 9 percent, and 11 percent are published in Tables 18,
21, 23, and 27 of Rev. Proc. 95-17, 1995-1 C.B. 556, 572, 575, 577, and
581.

Annual interest rates to be compounded daily pursuant to section 6622
that apply for prior periods are set forth in the tables accompanying this
revenue ruling.


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

DAILY RATE TABLE
PERIOD RATE IN 1995-1 C.B.
------ ---- ----------------
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
------------------ ------------------
TABLE TABLE
1995-1 1995-1
RATE C.B. PG RATE C.B. PG
---- ------ -- ---- ------ --
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
Oct. 1, 1996 -Dec. 31, 1996 8% 69 623 9% 71 625
Jan. 1, 1997--Mar. 31, 1997 8% 21 575 9% 23 577
Apr. 1, 1997--Jun. 30, 1997 8% 21 575 9% 23 577


TABLE OF INTEREST RATES FOR LARGE CORPORATE UNDERPAYMENTS

FROM JANUARY 1, 1991-PRESENT

TABLE
1995-1
RATE C.B. PG
---- ------ --
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
Oct. 1, 1996--Dec. 31, 1996 11% 75 629
Jan. 1, 1997--Mar. 31, 1997 11% 27 581
Apr. 1, 1997--Jun. 30, 1997 11% 27 581


TABLE OF INTEREST RATES FOR CORPORATE OVERPAYMENTS EXCEEDING $10,000

FROM JANUARY 1, 1995-PRESENT

TABLE
1995-1
RATE C.B. PG
---- ------ --
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
Oct. 1, 1996--Dec. 31, 1996 6.5% 66 620
Jan. 1, 1997--Mar. 31, 1997 6.5% 18 572
Apr. 1, 1997--Jun. 30, 1997 6.5% 18 572

<<END RULING>>

 

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