What is the IRC 6621 rate and how do I find out what the rate was for the applicable time period?
Section 6621 of the Internal Revenue Code establishes the rates for interest on tax overpayments and underpayments. The VFCP uses the underpayment rate as the rate of return that must be examined for determining lost earnings where it is not possible to ascertain the restoration of profits amount. The Internal Revenue Service publishes the 6621(a)(2) rate quarterly. The rate announcements can be found on the internet. Example 1 For simplicity, we have not attempted to illustrate calculations for typical numbers of participants or dollar amounts likely to be involved in actual plan transactions. This example demonstrates correction of delinquent contributions for one pay period for a plan that is not participant-directed. ABC Products, Inc. sponsors a 401(k) plan that allows participant contributions. ABC pays its employees and withholds the contributions on a bi-weekly basis. The plan does not provide for participant direction of investments and the plan fiduciary invests the plan asse
