December 8, 2005
No Change in Interest Rates for the First Quarter 2006
WASHINGTON — The Internal Revenue Service today announced there will be no change in the interest rates for the calendar quarter beginning January 1, 2006. 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 October 2005.
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Dean Knepper, CPA, CERTIFIED FINANCIAL PLANNER™ professional
2325 Dulles Corner Boulevard, Suite 500, Herndon, Virginia, 20171
208 South King Street, Suite 201, Leesburg, Virginia, email@example.com
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