• 6% for overpayments [5% in the case of a corporation];
• 6% percent for underpayments;
• 8% for large corporate underpayments; and
• 3.5% for the portion of a corporate overpayment exceeding USD10,000.

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 USD10,000 for a taxable period is the federal short-term rate plus one-half (0.5) of a percentage point.

The interest rates announced by the IRS are computed from the federal short-term rate based on daily compounding determined during July 2008.

Revenue Ruling 2008-47, announced the new rates and was published in Internal Revenue Bulletin 2008-39 on September 29, 2008.