Washington (Sept. 4, 2002) -- The Internal Revenue Service said that interest rates for the calendar quarter beginning October 1, 2002, will stay the same as they were for the third quarter of 2002.Currently, interest rates are set at six percent for overpayments [five percent for corporations]; six percent for underpayments; eight percent for large corporate underpayments; and three and one-half 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. For most corporations, 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 new rates were computed from the federal short-term rate based on daily compounding determined during July 2002.
-- Electronic Accountant Newswire staff
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