IRS interest rates unchanged for third quarter 2009
The IRS charges interest on taxes not paid by their due date, even if you have been granted an extension. The good news is that interest rates have been very low in recent years and remain low for the third quarter of 2009.
Interest and penalties
Interest begins accruing on any unpaid tax from the due date of the return until the date of payment. The IRS determines the rate of interest every three months. It uses the federal short–term rate as a base and adds three percent. The IRS compounds interest daily.
Individuals who file a return on time but who do not pay all of the tax owed at that time will generally pay a late payment penalty of one–half of one percent of the tax owed for each month, or part of a month, that the tax remains unpaid from the due date, until the tax is paid in full or a maximum penalty of 25 percent is applied. The one–half of one percent rate increases to one percent if the tax remains unpaid 10 days after the IRS issues a notice of intent to levy. For individuals who file by the return due date, the one-half of one percent rate decreases to one-quarter percent for any month in which an installment agreement is in effect.
Underpayments
For the calendar quarter starting July 1, 2009, the interest rate for individual underpayments is four percent. This is the same rate as in the second quarter of 2009. The interest rate for corporate underpayments is six percent for the third quarter of 2009. That rate is also unchanged from the second quarter.
Overpayments
Interest rates for corporate overpayments are also unchanged from the second quarter of 2009. The corporate overpayments rate is three percent (1.5 percent for corporate overpayments exceeding $10,000). For noncorporate taxpayers, the overpayment interest rate is four percent.
(IR-2009-54, Rev. Rul. 2009-17)
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