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:

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:

Total interest due: $282.89