-Published: Wednesday, December 11, 2019-
IRS interest rate unchanged for 2020 first quarter
By the A.M. Costa Rica wire services
Expats who underpay their U.S. taxes will continue to be assessed 5 percent interest. The Internal Revenue Service announced that interest rates will remain the same for the calendar quarter beginning Jan. 1.
According to the IRS, the rates will be:
5% for over payments (4% in the case of a corporation);
2.5% for the portion of a corporate over payment exceeding $10,000;
5% for underpayments; and
7% for large corporate underpayments.
Under the Internal Revenue Code, the rate of interest is determined on a quarterly basis. For taxpayers other than corporations, the over payment and underpayment rate is the federal short-term rate plus 3 percentage points, said the IRS.
Generally, in the case of a corporation, the underpayment rate is the federal short-term rate plus 3 percentage points and the over payment 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 over payment of tax exceeding $10,000 for a taxable period is the federal short-term rate plus one-half (0.5) of a percentage point.
According to IRS, the interest rates are computed from the federal short-term rate determined during last October to take effect Nov. 1, based on daily compounding.
Revenue Ruling 2019-28 , announcing the rates of interest will appear in Internal Revenue Bulletin 2019-52, dated Dec. 23. 2019.
However, the Revenue Ruling document can be reached at IRS site.
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