Can anyone tell me what it is or where to find the current interest rate being charged on amounts on payment plan. I can find the penalty portion on the IRS site, but not the interest rate.
Thanks.
LT.
Thanks.
LT.
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Only in government or politics is a "cut in spending" really an increase. It's just not as much of an increase as they wanted it to be, therefore a "cut". -
Payment Plan Interest rate
On page 15-2 TTB .25% of unpaid balance per month during term of installment agreement. -
The interest rate changes from time-to-time. I couldn't find the current rate doing a quick check, but it generally stays around 7-8% APR more or less. For estimating purposes I round it up slightly and just assume that the combined interest & penalty for FTP is around 1-1/4% per month.
There's really no difference between penalty and interest from the taxpayer's standpoint since neither one is deductible anyhow. So in simple terms, the cost of financing a tax liability with the IRS is roughly the equivalent of borrowing money at about 13-14% APR. I tell people that it's higher than 2nd mortgage rates, but about equal to the rate one would expect to pay on an unsecured loan, and much less than standard credit card rates.Last edited by JohnH; 04-07-2009, 05:35 PM."The only function of economic forecasting is to make astrology look respectful" - John Kenneth GalbraithComment
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Bert, I'm at home now, but I believe that it said this was the penalty, not the interest. The interest was a certain rate plus another percentage. This was the amount I was looking for.Originally posted by Bert73 View Post
Thanks for taking time to reply.
LTOnly in government or politics is a "cut in spending" really an increase. It's just not as much of an increase as they wanted it to be, therefore a "cut".Comment
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