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Interest Rates Remain the Same for the First Quarter of 2014.
(Parker Tax Publishing December 2013)
Interest rates on underpayments and overpayments of tax will remain the same for the calendar quarter beginning January 1, 2014, as they were for the last quarter of 2013. Rev. Rul. 2013-25.
The IRS announced that interest rates on underpayments and overpayments of tax will remain the same for the calendar quarter beginning January 1, 2014, as they were for the last quarter of 2013. 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
one-half (0.5) percent for the portion of a corporate overpayment exceeding $10,000.
Under the Code Sec. 6621(b), 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 tax period is the federal short-term rate plus one-half (0.5) of a percentage point.
The interest rates are computed from the federal short-term rate determined during October 2013 to take effect November 1, 2013, based on daily compounding.
For a discussion of the rules relating to interest on underpayments and overpayments of tax, see Parker Tax ΒΆ261,500. (Staff Editor Parker Tax Publishing)
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Disclaimer: This publication does not, and is not intended to, provide legal, tax or accounting advice, and readers should consult their tax advisors concerning the application of tax laws to their particular situations. This analysis is not tax advice and is not intended or written to be used, and cannot be used, for purposes of avoiding tax penalties that may be imposed on any taxpayer. The information contained herein is general in nature and based on authorities that are subject to change. Parker Tax Publishing guarantees neither the accuracy nor completeness of any information and is not responsible for any errors or omissions, or for results obtained by others as a result of reliance upon such information. Parker Tax Publishing assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect information contained herein.
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