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For purposes of further interest accrual on petitioners’
December 31, 1994, overpayment interest balance, it is
statutorily placed in the second and only other basket.
Petitioners’ interpretation of section 6621(a)(1) (that
would place in a third basket interest accruing after
December 31, 1994, on a corporation’s December 31, 1994,
overpayment interest balance) stretches the language of section
6621(a) beyond logic.
Disregarding fluctuations in the Federal short-term rate,
the language of section 6621(a)(1) establishes a specific and
definite overpayment interest rate where a corporation has made a
tax overpayment for a year of $10,000 or less and another
specific and definite overpayment interest rate where a
corporation has made a tax overpayment in excess of $10,000.4
If or where the reduced GATT rate becomes applicable to a
corporation for a year (because of a tax overpayment for the year
in excess of $10,000), the flush language of section 6621(a)(1)
does not provide its own, stand-alone, reduced interest rate that
becomes applicable only to overpayments of tax. Rather, that
language explicitly bumps the corporation back up into section
6621(a)(1)(B) and “substitutes” or replaces the “2 percentage
points” therein with “0.5 percentage point”. In that situation,
4 We note in the language of sec. 6621(a) the definite
article “the” –– “The overpayment rate”.
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