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Revenue Administrative Bulletin 1987-1
Revenue Administrative Bulletin 1987-1
Deficiency Interest Rate
For the Period July 1, 1987 through December 31, 1987
Approved: April 10, 1987
Note: See most current Interest Rate RAB for the current and historical rates.
RAB-87-1, the purpose of this policy statement is to establish the annual rate of interest due on a deficiency for the period beginning on July 1, 1987 and ending December 31, 1987.
A daily rate of interest of .0002329 (based on an adjusted annual rate of 8.5%) shall be added to a tax deficiency or an excessive claim for the period stated above.
The effective annual rate of 8.5% was established pursuant to section 23(2) of Act No. 58, P.A. of 1986, at 1 percentage point above the adjusted prime rate charged by 3 commercial banks to large businesses.
The following annual and corresponding daily rates of interest are in effect and will accrue on any deficiency due during these periods:
|
Start Date |
End Date |
Annual Rate |
Daily Rate |
|
October 1, 1967 |
June 30, 1986 |
9% |
.0002466 |
|
July 1, 1986 |
December 31, 1986 |
10.4% |
.0002849 |
|
January 1, 1987 |
June 30, 1987 |
9.2% |
.0002521 |
|
July 1, 1987 |
December 31, 1986 |
8.5% |
.0002329 |
Example: Taxpayer A, who is on a calendar year basis, filed a MI-1040 return for 1985, showing tax due of $2,000.00. If the tax is not paid until October 15, 1987, the amount of interest calculated due from April 16,1986 through October 15, 1987 is as follows:
|
Start Date of Interest Period |
End Date of Interest Period |
Number of Days in Interest Period |
Daily Interest Rate for Period |
Amount of Tax Due on Return |
Amount of Interest for Period |
|
April 16, 1986 |
June 30, 1986 |
75 |
.0002466 |
$2,000 |
$36.99 |
|
July 1, 1986 |
December 31, 1986 |
184 |
.0002849 |
$2,000 |
$104.80 |
|
January 1, 1987 |
June 30, 1987 |
181 |
.0002521 |
$2,000 |
$91.28 |
|
July 1, 1987 |
October 15, 1987 |
107 |
.0002329 |
$2,000 |
$49.84 |
Total interest due: $282.89