- 11 -
the tax overpayment itself and the interest to be paid on
interest is not found in the statute.”
Petitioner further challenges the Court of Appeals for the
Federal Circuit’s position that section 6611 authorizes the
payment of interest by explaining that only simple interest was
paid before section 6622 became law. Interest on interest is a
function of the compounding provided by section 6622; however,
the interest that is compounded originates as the interest
authorized by section 6611 on an overpayment, and the rate of
both is set by section 6621. One common component of the
interest rate applicable to all overpayments is the Federal
short-term rate. Sec. 6621(a)(1)(A). The Federal short-term
rate used in section 6621(a)(1)(A) is redetermined on a quarterly
basis. Sec. 6621(b). A fluctuation in the Federal short-term
rate affects the rate applicable to corporate overpayments under
both sections 6611 and 6622. Similarly, there is no logical
reason that requires a different result regarding the GATT rate
change, effective after December 31, 1994.
Petitioner points to the refund estimates prepared for
Congress at the time the GATT rate was adopted to support its
position. Petitioner asserts that in these estimates accrued
interest was not subject to the lower GATT rate. Petitioner also
argues that respondent initially applied the GATT rate only to
the overpayment, not the accrued interest, and now respondent has
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Next
Last modified: May 25, 2011