NO CHANGE IN INTEREST RATES FOR THE FIRST QUARTER OF 2007

WASHINGTON - The Internal Revenue Service today announced there will be no change in the interest rates for the calendar quarter beginning January 1, 2007.  The interest rates are as follows: 
 
     -  eight (8) percent for overpayments [seven (7) percent in the case of a corporation];

     -  eight (8) percent for underpayments;

     -  ten (10) percent for large corporate underpayments; and

     -  five and one-half (5.5) 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 based on daily compounding determined during October 2006.

 

Rev. Rul. 2006-63, announcing the new rates of interest, is attached and will appear in Internal Revenue Bulletin No. 2006-52, dated December 26, 2006.

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