• four (4) percent for overpayments [three (3) percent in the case of a corporation];
• four (4) percent for underpayments;
• six (6) percent for large corporate underpayments; and
• one and one-half (1.5) 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 during January 2009 to take effect February 1, 2009, based on daily compounding.

The rate for determining the addition to tax for failure to pay estimated tax for the first 15 days in April 2009 is the 5 percent rate that applied to underpayments of tax during the first calendar quarter in 2009.

Revenue Ruling 2009-07, announcing the new rates of interest, is attached and will appear in Internal Revenue Bulletin No. 2009-13, dated March 30, 2009.

In Related News:

• IRS says interest rates remain same for Q1 of 2010
• Interest rates to remain steady for fourth quarter 2009
• IRS to hold interest rates steady for third quarter
• SB 283 seeks to protect consumers against unfair interest rates
• COBRA subsidy eligibility period extended thru Feb; 15-month subsidy available

News via Lafayette Indiana Online

Interest rates drop for the second quarter of 2009