IR-2004-144, Dec. 2, 2004
WASHINGTON — The Internal Revenue Service today announced there will be no change in the interest rates for the calendar quarter beginning Jan. 1, 2005. The interest rates are as follows:
5 percent for overpayments [4 percent in the case of a corporation];
5 percent for underpayments;
7 percent for large corporate underpayments; and
2.5 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 2004.
Related Item: Revenue Ruling 2004-111 (PDF 40K)