Interest rates will not change for the calendar quarter starting April 1, 2025, according to a statement released by the Internal Revenue Service this past Monday.
The annual compound interest rate for overpayments and underpayments for individuals will be 7%. The full list of the updated rates is as follows:
- 7% for overpayments (payments made more than the amount owed), 6% for corporations.
- 4.5% for the portion of a corporate overpayment exceeding $10,000.
- 7% for underpayments (taxes owed but not fully paid).
- 9% for large corporate underpayments.
The rate of interest is set quarterly in accordance with the Internal Revenue Code. The federal short-term rate plus three percentage points is the overpayment and underpayment rate for taxpayers that are not reporting as a “Corporation”.
For Corporations, the federal short-term rate plus three percentage points is often the underpayment rate, while the federal short-term rate plus two percentage points is the overpayment rate. The federal short-term rate plus five percentage points is the rate for underpayments by large corporations. The federal short-term rate plus one-half (0.5) of a percentage point is the rate applied to the portion of a corporate overpayment of taxes that exceeds $10,000 for a taxable period.
The interest rates announced Monday are computed from the federal short-term rate determined during January 2025. See the revenue ruling for details. Revenue Ruling 2025-7 PDF announcing the rates of interest, is attached and will appear in Internal Revenue Bulletin 2025-13, dated March 24, 2025. Stay tuned for more information.
To find out more about how Wilson Tax Law Group, APLC, could help you or your business with tax litigation and strengthen your defense strategies, we invite you to set up a consultation with our firm.
Wilson Tax Law Group, APLC is a boutique Orange County tax controversy law firm that specializes in representation of individuals and businesses before federal and state tax authorities with audits, appeals, FBAR, offshore compliance, litigation and criminal defense. Firm founder, Joseph P. Wilson, is a former Federal tax prosecutor and trial attorney for the IRS and California Franchise Tax Board. Wilson Tax Law Group, APLC, is comprised of former IRS litigators & Special Agents, and Assistant US Attorneys from the US Attorney’s Office, Central District of California, Tax Division, which at the time handled both civil tax lawsuits and criminal tax prosecutions on behalf of the United States of America.
For further information, or to arrange a consultation please contact: Wilson Tax Law Group, APLC
Tel: (949) 397-2292 (Newport Beach Office)
Tel: (714) 463-4430 (Yorba Linda Office)
Disclaimer: This blog post is for informational purposes only and does not constitute legal, tax or financial advice. Please consult with a qualified attorney, accountant or financial advisor for specific guidance related to your circumstances.
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