IR-2005-85, Sept. 1, 2005 WASHINGTON — The Internal Revenue Service today announced there will be a one-percentage-point increase in interest rates for the calendar quarter beginning Oct. 1, 2005. The interest rates are as follows: • Seven (7) percent for overpayments [six (6) percent in the case of a corporation]; • Seven (7) percent for underpayments; • Nine (9) percent for large corporate underpayments; and • Four and one-half (4.5) 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 July 2005. Rev. Rul. 2005-62 announces the new rates of interest and will appear in Internal Revenue Bulletin No. 2005-38, dated Sept. 19, 2005. Subscribe to IRS Newswire
