The Inland Revenue Service released Revenue Ruling 2016-28 on 5 December 2016 with the announcement of the interest rates on tax overpayments (i.e. tax refunds) and tax underpayments (i.e. tax assessments and late tax payments) for the calendar quarter beginning 1 January 2017.
The interest rates, which apply to amounts bearing interest during that calendar quarter, are as follows;
- 4% for non-corporate overpayments; 3% for corporate overpayments up to USD 10,000
- 5% for corporate overpayments to the extent in excess of USD 10,000
- 4% for non-corporate and corporate (other than large corporate) underpayments
- 6% for large corporate underpayments (i.e. underpayments in excess of USD 100,000)
The interest rates on overpayments and underpayments for the first quarter of 2017 are unchanged from the rates announced for the fourth quarter of 2016. Revenue Ruling 2016-28 also includes interest factors for daily compound interest for an annual rate of 0.5% (Appendix A) and tables including overpayment and underpayment interest rates for prior periods.
Revenue Procedure 2016-28 will appear in the IRS Internal Revenue Bulletin (IRB) as part of IRB 2016-51 dated 19 December 2016.
