Section 6601(j) Example 2

 

Section 6601(j) Example 2
Determining the §6601(j) Interest Payable on Each Anniversary Date Through Feb-10-2021
Section 6166(b)(10) From Example 1
 

§6166(b)(10)

 Installment Number
1 2 3 4 5
Due Date 1st Ann. Date 2nd Ann. Date   3rd Ann. Date 4th Ann. Date
Feb-10-2017 Feb-10-2018 Feb-10-2019 Feb-10-2020 Feb-10-2021
2% portion of tax 592,000.00 473,600.00 355,200.00 236,800.00 118,400.00
2% installment due 118,400.00 118,400.00 118,400.00 118,400.00 118,400.00
2% interest due 0.00 9,567.09 7,175.32 4,782.06 2,392.51
Total 2% installment due 118,400.00 127,967.09 125,575.32 123,182.06 120,792.51
2% tax balance forward 473,600.00 355,200.00 236,800.00 118,400.00 0.00
           
45% of R% portion of tax 3,945,541.57 3,156,433.26 2,367,324.94 1,578,216.63 789,108.31
45% of R% installment due 789,108.31 789,108.32 789,108.31 789,108.32 789,108.31
45% of R% interest due 0.00 57,328.79 42,996.60 28,655.52 14,336.64
Total 45% of R% installment due 789,108.31 846,437.11 832,104.91 817,763.84 803,444.95
45% of R% tax balance forward 3,156,433.26 2,367,324.94 1,578,216.63 789,108.31 0.00
           
Total tax installment due 907,508.31 907,508.32 907,508.31 907,508.32 907,508.31
Total interest due 0.00 66,895.88 50,171.91 33,437.58 16,729.15
Total installment due 907,508.31 974,404.20 957,680.22 940,945.90 924,237.46

 

Section 6601(j) Example 2, Comment 1:   The numbers in this table assume:
  • The return was filed on the return due date with all payments then due;
  • There was no change in tax from an IRS examination;
  • There were no payments other than the amounts billed for each anniversary date; and,
  • All anniversary date payments were timely.