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No Change in Interest Rate for First Quarter 2006

IR-2005-140, Dec. 8, 2005

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.

Related Item: Revenue Ruling 2005-78

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Page Last Reviewed or Updated: 18-Aug-2012