The new rates will be: 

• 5 percent for overpayments (4 percent in the case of a corporation);
• 5 percent for underpayments;
• 7 percent for large corporate underpayments; and 
• 2.5 percent for the portion of a corporate overpayment exceeding $10,000.

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. The rate for large corporate underpayments is the federal short-term rate plus 5 percentage points. The rate on the portion of a corporate overpayment of tax exceeding $10,000 for a taxable period is the federal short-term rate plus one-half (0.5) of a percentage point.

The interest rates are computed from the federal short-term rate based on daily compounding determined during April 2008.

Revenue Ruling 2008-27 announcing the new rates of interest will appear in Internal Revenue Bulletin No. 2008-26, dated June 30, 2008.