The IRS will charge 7 percent on unpaid tax in the fourth quarter, which is what it has charged in seven of the last eight quarters
Seven percent.
That is what the Internal Revenue Service will charge on tax owed and not paid in the quarter beginning 1 October, and it is what it will pay an individual on an overpayment in the same quarter. The agency announced the figures on Friday as IR-2026-98, carrying Revenue Ruling 2026-15. Nothing moved from the third quarter.
One number sets the whole table
Section 6621 does not fix any of these rates directly. It fixes them as margins over the federal short-term rate: three percentage points for the underpayment rate, three for an individual overpayment, two for a corporate overpayment, half a point for the portion of a corporate overpayment above $10,000, and five points for a large corporate underpayment. Move the short-term rate and every line in the announcement moves with it.
So the announcement is really about one figure, and that figure is rounded before it is used. Section 6621(b)(3) takes the short-term rate determined in the first month of the preceding quarter and rounds it to the nearest full percent, with an exact half rounded up. The ruling puts the July 2026 rate, on daily compounding, at 4 percent. In Revenue Ruling 2026-13, the short-term applicable federal rate published for August is 4.10 percent on annual compounding.
The rounding is not a rounding of the answer. It is a rounding of the input, and it means the rate a taxpayer actually pays can sit still through a real move in short-term rates and then jump a full point when the move crosses a boundary.
The one quarter that broke the run
The tables at the back of the ruling carry every quarter since 1987, and they are the reason this announcement is worth reading rather than filing. The noncorporate rate has been 7 percent in every quarter since January 2025 with a single exception. From April to June this year it was 6 percent. In July it went back to 7, and it stays there.
The large corporate underpayment rate tells the same story from five points higher up: 9 percent in the first quarter of this year, 8 percent in the second, 9 percent in the third and fourth. One quarter, one point, in both tables, which is what a single whole-percent step in the short-term rate looks like from either end.
What else the ruling sets
The underpayment rate is the rate sections 6654 and 6655 use to compute the addition to tax for failing to pay estimated tax, so 7 percent is also the number behind a shortfall on a fourth-quarter estimate. Deposits made under section 6603 earn 4 percent. Interest factors for daily compounding at 4.5, 6, 7 and 9 percent sit in tables 14, 17, 19 and 23 of Revenue Procedure 95-17.
One asymmetry is worth naming because it is easy to miss in a list of five numbers. An individual and the government charge each other the same 7 percent. A corporation does not. It pays 7 percent on what it owes, collects 6 percent on what it overpaid, and collects 4.5 percent on the part of that overpayment above $10,000. That gap is written into section 6621 itself rather than chosen this quarter.
The ruling will appear in Internal Revenue Bulletin 2026-36, dated 31 August.
