26 U.S. Code § 6621 - Determination of rate of interest
The Secretary shall determine the Federal short-term rate for the first month in each calendar quarter.
Except as provided in subparagraph (B), the Federal short-term rate determined under paragraph (1) for any month shall apply during the first calendar quarter beginning after such month.
In determining the addition to tax under section 6654 for failure to pay estimated tax for any taxable year, the Federal short-term rate which applies during the 3rd month following such taxable year shall also apply during the first 15 days of the 4th month following such taxable year.
The Federal short-term rate for any month shall be the Federal short-term rate determined during such month by the Secretary in accordance withsection 1274(d). Any such rate shall be rounded to the nearest full percent (or, if a multiple of ½ of 1 percent, such rate shall be increased to the next highest full percent).
For purposes of determining the amount of interest payable undersection 6601 on any large corporate underpaymentfor periods after the applicable date, paragraph (2) of subsection (a) shall be applied by substituting “5 percentage points” for “3 percentage points”.
In the case of any underpayment of any tax imposed by this title to which the deficiency procedures do not apply, subparagraph (A) shall be applied by taking into account any letter or notice provided by the Secretary which notifies the taxpayer of the assessment or proposed assessment of the tax.
For purposes of subparagraph (A), a letter or notice shall be disregarded if, during the 30-day period beginning on the day on which it was sent, the taxpayer makes a payment equal to the amount shown as due in such letter or notice, as the case may be.
For purposes of this paragraph, any letter or notice shall be disregarded if the amount of the deficiency or proposed deficiency (or the assessment or proposed assessment) set forth in such letter or notice is not greater than $100,000 (determined by not taking into account any interest, penalties, or additions to tax).
The term “large corporate underpayment” means any underpayment of a tax by a C corporation for any taxable periodif the amount of such underpayment for such period exceeds $100,000.
To the extent that, for any period, interest is payable under subchapter A and allowable under subchapter B on equivalent underpayments and overpayments by the same taxpayer of tax imposed by this title, the net rate of interest under this section on such amounts shall be zero for such period.
2019—Subsec. (c)(2)(A)(i).Pub. L. 116–25 substituted “Internal Revenue Service Independent Office of Appeals” for “Internal Revenue Service Office of Appeals”.
1998—Subsec. (a)(1)(B).Pub. L. 105–206, § 3302(a), amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “2 percentage points.”
Subsec. (d).Pub. L. 105–206, § 3301(a), added subsec. (d).
1997—Subsec. (a)(1).Pub. L. 105–34, § 1604(b)(1), substituted “subsection (c)(3), applied by substituting ‘overpayment’ for ‘underpayment’)” for “subsection (c)(3))” in concluding provisions.
Subsec. (c)(2)(B)(iii).Pub. L. 105–34, § 1463(a), added cl. (iii).
1996—Subsec. (c)(2)(A).Pub. L. 104–188, § 1702(c)(6), inserted closing provisions “The preceding sentence shall be applied without regard to any such letter or notice which is withdrawn by the Secretary.”
Subsec. (c)(2)(B)(i).Pub. L. 104–188, § 1702(c)(7), substituted “this title” for “this subtitle”.
1994—Subsec. (a)(1).Pub. L. 103–465 inserted concluding provisions.
1990—Subsec. (c).Pub. L. 101–508 added subsec. (c).
1989—Subsec. (c).Pub. L. 101–239 repealed subsec. (c) which related to attribution of interest on substantial underpayments to tax motivated transactions.
1988—Subsec. (a)(1)(A), (2)(A).Pub. L. 100–647, § 1015(d)(1), substituted “Federal short-term” for “short-term Federal”.
Subsec. (b).Pub. L. 100–647, § 1015(d)(2), substituted “Federal short-term” for “short-term Federal” in heading.
Subsec. (b)(1).Pub. L. 100–647, § 1015(d)(1), substituted “Federal short-term” for “short-term Federal”.
1986—Subsec. (a).Pub. L. 99–514, § 1511(a), added subsec. (a) and struck out former subsec. (a) which read as follows: “The annual rate established under this section shall be such adjusted rate as is established by the Secretary under subsection (b).”
Subsec. (b).Pub. L. 99–514, § 1511(a), added subsec. (b) relating to determination of Federal short-term rate and struck out former subsec. (b) which related to interest rate adjustments and establishment of adjusted rates.
Subsec. (c).Pub. L. 99–514, § 1511(a), (c)(1), redesignated subsec. (d) as (c), in par. (1), struck out “annual” before “rate of interest” and substituted “the underpayment rate established under this section” for “the adjusted rate established under subsection (b)”, and struck out former subsec. (c) definition of prime rate, which read as follows: “For purposes of subsection (b), the term ‘adjusted prime rate charged by banks’ means the average predominant prime rate quoted by commercial banks to large businesses, as determined by the Board of Governors of theFederal Reserve System.”
Subsec. (c)(3)(A)(v).Pub. L. 99–514, § 1535(a), added cl. (v).
Subsec. (d).Pub. L. 99–514, § 1511(c)(1)(A), redesignated subsec. (d) as (c).
1984—Subsec. (d).Pub. L. 98–369 added subsec. (d).
1982—Subsec. (b).Pub. L. 97–248 substituted provisions that if the adjusted prime rate charged by banks (rounded to the nearest full percent) during the 6-month period ending on September 30 of any calendar year, or during the 6-month period ending on March 31 of any calendar year, differs from the interest rate in effect under this section on either such date, respectively, then the Secretary shall establish, within 15 days after the close of the applicable 6-month period, an adjusted rate of interest equal to such adjusted prime rate, and that any adjusted rate of interest established under paragraph (1) shall become effective on January 1 of the succeeding year in the case of an adjustment attributable to paragraph (1)(A), and on July 1 of the same year in the case of an adjustment attributable to paragraph (1)(B), for provisions that the Secretary was to establish an adjusted rate of interest for the purpose of subsection (a) not later than October 15 of any year if the adjusted prime rate charged by banks during September of that year, rounded to the nearest full percent, was at least a full percentage point more or less than the interest rate which was then in effect, and that any such adjusted rate of interest would be equal to the adjusted prime rate charged by banks, rounded to the nearest full percent, and would become effective on January 1 of the immediately succeeding year.
1981—Subsec. (b).Pub. L. 97–34, § 711(a), struck out provision that an adjustment provided for under this subsection not be made prior to the expiration of 23 months following the date of any preceding adjustment under this subsection which changes the rate of interest.
Pub. L. 97–34, § 711(c), substituted “January 1” for “February 1”.
Subsec. (c).Pub. L. 97–34, § 711(b), struck out “90 percent of” before “the average predominant prime rate”.
1979—Subsec. (a).Pub. L. 96–167 substituted provisions setting the annual rate established under this section to be such adjusted rate as is established by the Secretary under subsec. (b) of this section for provision that the rate of interest under sections 6601(a), 6602, 6611(a), 6332(c)(1), and 7426(g) of this title, and undersection 2411(a) of title 28 was to be 9 percent per annum, or such adjusted rate as was established by the Secretary under subsection (b).
1976—Subsecs. (a), (b).Pub. L. 94–455 struck out “or his delegate” after “Secretary”.
Amendment bysection 3301(a) of Pub. L. 105–206 applicable to interest for periods beginning afterJuly 22, 1998, and, subject to applicable statutes of limitation, to interest for periods beginning beforeJuly 22, 1998, if taxpayer reasonably identifies and establishes periods of overpayments and underpayments for which zero rate applies, and not later thanDec. 31, 1999, requests application of subsec. (d) of this section to such periods, seesection 3301(c) of Pub. L. 105–206, set out as a note undersection 6601 of this title.
Pub. L. 105–206, title III, § 3302(b),July 22, 1998,112 Stat. 742, provided that:
Pub. L. 105–34, title XIV, § 1463(b),Aug. 5, 1997,111 Stat. 1058, provided that:
Amendment bysection 1604(b)(1) of Pub. L. 105–34 effective as if included in the sections of theUruguay Round Agreements Act,Pub. L. 103–465, to which it relates, seesection 1604(b)(4) of Pub. L. 105–34, set out as a note undersection 412 of this title.
Amendment byPub. L. 104–188 effective, except as otherwise expressly provided, as if included in the provision of theRevenue Reconciliation Act of 1990,Pub. L. 101–508, title XI, to which such amendment relates, seesection 1702(i) of Pub. L. 104–188, set out as a note undersection 38 of this title.
Pub. L. 103–465, title VII, § 713(b),Dec. 8, 1994,108 Stat. 5002, provided that:
Pub. L. 101–508, title XI, § 11341(b),Nov. 5, 1990,104 Stat. 1388–471, provided that:
Amendment byPub. L. 101–239 applicable to returns the due date for which (determined without regard to extensions) is afterDec. 31, 1989, seesection 7721(d) of Pub. L. 101–239, set out as a note undersection 461 of this title.
Amendment byPub. L. 100–647 effective, except as otherwise provided, as if included in the provision of theTax Reform Act of 1986,Pub. L. 99–514, to which such amendment relates, seesection 1019(a) of Pub. L. 100–647, set out as a note undersection 1 of this title.
Amendment by section 1511(a), (c)(1) ofPub. L. 99–514 applicable for purposes of determining interest for periods afterDec. 31, 1986, seesection 1511(d) of Pub. L. 99–514, set out as a note undersection 47 of this title.
Pub. L. 99–514, title XV, § 1535(b),Oct. 22, 1986,100 Stat. 2750, provided that:
Pub. L. 98–369, div. A, title I, § 144(c),July 18, 1984,98 Stat. 684, provided that:
Pub. L. 97–248, title III, § 345(b),Sept. 3, 1982,96 Stat. 636, as amended byPub. L. 98–369, div. A, title VII, § 714(m),July 18, 1984,98 Stat. 963, provided that:
Pub. L. 97–34, title VII, § 711(d),Aug. 13, 1981,95 Stat. 340, provided that:
Pub. L. 96–167, § 4(c)(2),Dec. 29, 1979,93 Stat. 1276, provided that:
Pub. L. 93–625, § 7(e),Jan. 3, 1975,88 Stat. 2116, provided that:
Pub. L. 99–514, title XV, § 1511(b),Oct. 22, 1986,100 Stat. 2744, provided that: