IRS Interest Rates Stick for 2nd Quarter 2014

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Overpayment and underpayment rates remain the same for the second quarter of 2014

Rev Rul 2014-11, 2014-14 IRB; IR 2014-29

IRS has announced that the interest rates for tax overpayments and underpayments for the calendar quarter beginning Apr. 1, 2014, will remain the same as for the first quarter of 2014.

RIA observation: The interest rates for tax overpayments and underpayments have remained constant for eleven quarters in a row (i.e., beginning Oct. 1, 2011 and ending on June 31, 2014).

For noncorporate taxpayers, the rate for both underpayments and overpayments for the second quarter of 2014 will remain unchanged at 3%. The 3% rate also applies to estimated tax underpayments for the second quarter in 2014.

For corporations, the overpayment rate for the second quarter of 2014 will remain at 2%. Corporations will receive .5% for overpayments exceeding $10,000. The underpayment rate for the second quarter of 2014 for corporations will be 3%, but will be 5% for large corporate underpayments.

Interest factors for daily compound interest for annual rates of 0.5% are published in Appendix A of Rev Rul 2014-11. Interest factors for daily compound interest for an annual rate of 2%, 3%, and 5% are published in Tables 9, 11, and 15 of Rev Proc 95-17, 1995-1 CB 556.

Keep in mind, even though IRS interest rates remain the same for the 2nd Quarter, if a tax remains unpaid, the snowball effect will continue.  To insure you are not accruing interest and penalties on your account it is best to pay your tax bill in full and timely going forward.  If you have a back tax issue and are unsure as to how to pay it or where to remit monies, feel free to call us at 720-398-6088 and we will be glad to assist!

References: For interest on tax overpayments, see FTC 2d/FIN ¶ T-8002 ; United States Tax Reporter ¶ 66,214 ; TaxDesk ¶ 807,001 ; TG ¶ 70901 . For interest on tax underpayments, see FTC 2d/FIN ¶ V-1101 ; United States Tax Reporter ¶ 66,214 ; TaxDesk ¶ 851,001 ; TG ¶ 71566 .

A big thank you to Steve Rael at Thomson Reuters for sharing the article steve.rael@thomsonreuters.com