The Internal Revenue Service announced that interest rates will increase for the calendar quarter beginning April 1, 2022. The rates will be:

  • 4% for overpayments (3% in the case of a corporation);
  • 1.5% for the portion of a corporate overpayment exceeding $10,000;
  • 4% for underpayments; and
  • 6% for large corporate underpayments.

Under the Internal Revenue Code, the rate of interest is determined every quarter. For taxpayers other than corporations, the overpayment and underpayment rate is the federal short-term rate plus 3 percentage points, according to a news release.

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 announced recently are computed from the federal short-term rate determined during January 2022 to take effect Feb. 1, 2022, based on daily compounding, according to the news release.

The Internal Revenue Service’s Low Income Taxpayer Clinic program

The Internal Revenue Service’s Low Income Taxpayer Clinic program office announced that its 2022 Publication 4134, Low Income Taxpayer Clinic List, is now available.

IRS Publication 4134, Low Income Taxpayer Clinic List, provides information about LITCs by geographic area, including contact information and details about the languages, in addition to English, in which each LITC offers services, according to another news release.

How a LITC Can Help

A Low Income Taxpayer Clinic represents individuals whose incomes are generally at or below 250% of the federal poverty guideline, and who are seeking to resolve tax problems with the IRS, such as audits, appeals, and tax collection disputes. LITCs can represent taxpayers in court as well as before the IRS. They also can provide information about taxpayer rights and responsibilities in different languages for English as a Second Language (ESL) taxpayers, the news release added.

LITC Program Information

The LITC program is a federal grant program administered by the Taxpayer Advocate Service, led by National Taxpayer Advocate Erin M. Collins. Through the LITC program, the IRS awards matching grants of up to $100,000 per year to qualifying organizations. LITCs provide services for free or for a small fee. They receive IRS grants but work independently to assist and advocate for taxpayers.

Interested in Becoming a LITC?

Organizations interested in representing, educating, and advocating for low-income and ESL taxpayers can check out this video about applying for a LITC grant and review the most recent application package

There are presently no LITCs in the states of Montana and North Dakota, the territory of Puerto Rico, as well as unserved counties in the states of Arizona, Florida, Idaho, Nevada, North Carolina, and Pennsylvania. Qualifying organizations that will serve taxpayers in these states, territories, and unserved counties are strongly encouraged to apply.

A complete list of organizations that are currently funded and where they are located can be found by looking at Publication 4134.  Individuals who have questions or need additional information about the LITC program or application process can contact Karen Tober with the LITC program office via email at litcprogramoffice@irs.gov.

Source: IRS