IRS Maintains Interest Rate Paid To Taxpayers For Delayed Refund Processing
The Internal Revenue Service announced interest rates will remain the same for the calendar quarter beginning July 1, 2021.
The rates are important to energy marketers who have outstanding refunds (underpayments) due from the IRS for the sale of clear untaxed diesel to state and local governments and other exempt groups.
The IRS continues to process the backlog of delayed refunds caused by COVID-19. Those rates include:
— 3 percent for overpayments (2 percent in the case of a corporation);
— 0.5 percent for the portion of a corporate overpayment exceeding $10,000;
— 3 percent for underpayments; and
— 5 percent 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 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.
Click Here to read Revenue Ruling 2021-10 for more information.