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Interest rates, tax overpayments and underpayments (third quarter 2019)

Interest rates, tax overpayments and underpayments

The IRS today released an advance version of Rev. Rul. 2019-15 that provides the rates of interest with regard to tax overpayments and tax underpayments for the calendar quarter beginning July 1, 2019. The rates of interest will decrease for the third quarter 2019.

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Rev. Rul. 2019-15 [PDF 52 KB] lists the interest rates for the calendar quarter beginning July 1, 2019, as follows:

  • 5% for overpayments
  • 4% for overpayments by a corporate taxpayer
  • 2½% (2.5%) for the portion of a corporate overpayment exceeding $10,000
  • 5% for underpayments
  • 7% for large corporate underpayments


In a related IRS release—IR-2019-103—the IRS noted that this is a reduction in the rates of interest (this is the first rate reduction since the fourth quarter 2011).

Background

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.

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