Tax Notes logo
HOMETax Notes ResearchFederalIRS Guidancerevenue rulings

IRS Publishes T-Bill Rate Used for Tax on DISC Income

DEC. 10, 2018

Rev. Rul. 2018-31; 2018-50 IRB 848

DATED DEC. 10, 2018
DOCUMENT ATTRIBUTES
  • Institutional Authors
    Internal Revenue Service
  • Code Sections
  • Subject Areas/Tax Topics
  • Jurisdictions
  • Tax Analysts Document Number
    2018-48009
  • Tax Analysts Electronic Citation
    2018 TNT 237-41
    2018 TPR 51-17
Citations: Rev. Rul. 2018-31; 2018-50 IRB 848

Part I. Rulings and Decisions Under the Internal Revenue Code of 1986

Section 995. — Taxation of DISC Income to Shareholders

Section 995(f)(1) of the Internal Revenue Code provides that a shareholder of a domestic international sales corporation (“DISC”) shall pay interest each taxable year in an amount equal to the product of the “shareholder's DISC-related deferred tax liability” for the year (as defined in section 995(f)(2)) and the “base period T-bill rate.” Under section 995(f)(4), the base period T-bill rate is the annual rate of interest determined by the Secretary to be equivalent to the average of the 1-year constant maturity Treasury yields, as published by the Board of Governors of the Federal Reserve System, for the 1-year period ending on September 30 of the calendar year ending with (or the most recent calendar year ending before) the close of the taxable year of the shareholder.

The base period T-bill rate for the period ending September 30, 2018, is 2.06 percent.

Pursuant to section 6622 of the Internal Revenue Code, interest must be compounded daily. The table below provides factors for compounding the 2018 base period T-bill rate daily for any number of days in the shareholder's taxable year (including for a 52–53 week accounting period). To compute the amount of the interest charge for the shareholder's taxable year, multiply the amount of the shareholder's DISC-related deferred tax liability for that year by the base period T-bill rate factor corresponding to the number of days in the shareholder's taxable year for which the interest charge is being computed. Generally, one would use the factor for 365 days. One would use a different factor only if the shareholder's taxable year for which the interest charge is being determined is a short taxable year, if the shareholder uses a 52–53 week taxable year, or if the shareholder's taxable year is a leap year.

For the base period T-bill rates for periods ending in prior years, see Rev. Rul. 2017–23, 2017–49 I.R.B. 546; Rev. Rul. 2017–01, 2017–03 I.R.B. 377; Rev. Rul. 2015–26, 2015–49 I.R.B. 696; Rev. Rul. 2014–33, 2014–52 I.R.B. 957; Rev. Rul. 2013–24, 2013–49 I.R.B. 594; Rev. Rul. 2012–22, 2012–48 I.R.B. 565; and Rev. Rul. 2011–30, 2011–49 I.R.B. 826.

DRAFTING INFORMATION

The principal author of this revenue ruling is Lorraine S. Rodriguez of the Office of Associate Chief Counsel (International). For further information regarding the revenue ruling, contact Ms. Rodriguez at (202) 317-6726 (not a toll-free number).

 

ANNUAL RATE,
COMPOUNDED DAILY

DAYS

2.06 PERCENT FACTOR

1

0.000056438

2

0.000112880

3

0.000169325

4

0.000225773

5

0.000282224

6

0.000338678

7

0.000395135

8

0.000451596

9

0.000508060

10

0.000564527

11

0.000620997

12

0.000677471

13

0.000733947

14

0.000790427

15

0.000846910

16

0.000903396

17

0.000959885

18

0.001016378

19

0.001072874

20

0.001129373

21

0.001185875

22

0.001242380

23

0.001298888

24

0.001355400

25

0.001411915

26

0.001468433

27

0.001524954

28

0.001581479

29

0.001638006

30

0.001694537

31

0.001751071

32

0.001807608

33

0.001864149

34

0.001920692

35

0.001977239

36

0.002033789

37

0.002090342

38

0.002146898

39

0.002203458

40

0.002260021

41

0.002316586

42

0.002373156

43

0.002429728

44

0.002486303

45

0.002542882

46

0.002599464

47

0.002656049

48

0.002712637

49

0.002769229

50

0.002825823

51

0.002882421

52

0.002939022

53

0.002995626

54

0.003052234

55

0.003108844

56

0.003165458

57

0.003222075

58

0.003278695

59

0.003335319

60

0.003391945

61

0.003448575

62

0.003505208

63

0.003561844

64

0.003618484

65

0.003675126

66

0.003731772

67

0.003788421

68

0.003845073

69

0.003901729

70

0.003958387

71

0.004015049

72

0.004071714

73

0.004128382

74

0.004185053

75

0.004241728

76

0.004298406

77

0.004355087

78

0.004411771

79

0.004468458

80

0.004525149

81

0.004581843

82

0.004638539

83

0.004695240

84

0.004751943

85

0.004808650

86

0.004865359

87

0.004922072

88

0.004978788

89

0.005035508

90

0.005092230

91

0.005148956

92

0.005205685

93

0.005262417

94

0.005319153

95

0.005375891

96

0.005432633

97

0.005489378

98

0.005546126

99

0.005602877

100

0.005659632

101

0.005716390

102

0.005773151

103

0.005829915

104

0.005886682

105

0.005943453

106

0.006000227

107

0.006057004

108

0.006113784

109

0.006170567

110

0.006227354

111

0.006284144

112

0.006340937

113

0.006397733

114

0.006454532

115

0.006511335

116

0.006568141

117

0.006624950

118

0.006681762

119

0.006738578

120

0.006795396

121

0.006852218

122

0.006909043

123

0.006965872

124

0.007022703

125

0.007079538

126

0.007136376

127

0.007193217

128

0.007250061

129

0.007306909

130

0.007363759

131

0.007420613

132

0.007477470

133

0.007534331

134

0.007591194

135

0.007648061

136

0.007704931

137

0.007761804

138

0.007818681

139

0.007875560

140

0.007932443

141

0.007989329

142

0.008046219

143

0.008103111

144

0.008160007

145

0.008216906

146

0.008273808

147

0.008330713

148

0.008387622

149

0.008444533

150

0.008501448

151

0.008558366

152

0.008615288

153

0.008672212

154

0.008729140

155

0.008786071

156

0.008843006

157

0.008899943

158

0.008956884

159

0.009013827

160

0.009070775

161

0.009127725

162

0.009184678

163

0.009241635

164

0.009298595

165

0.009355558

166

0.009412525

167

0.009469494

168

0.009526467

169

0.009583443

170

0.009640422

171

0.009697405

172

0.009754390

173

0.009811379

174

0.009868371

175

0.009925367

176

0.009982365

177

0.010039367

178

0.010096372

179

0.010153380

180

0.010210391

181

0.010267406

182

0.010324424

183

0.010381445

184

0.010438469

185

0.010495497

186

0.010552527

187

0.010609561

188

0.010666598

189

0.010723639

190

0.010780682

191

0.010837729

192

0.010894779

193

0.010951832

194

0.011008889

195

0.011065949

196

0.011123011

197

0.011180078

198

0.011237147

199

0.011294219

200

0.011351295

201

0.011408374

202

0.011465456

203

0.011522542

204

0.011579631

205

0.011636722

206

0.011693818

207

0.011750916

208

0.011808017

209

0.011865122

210

0.011922230

211

0.011979341

212

0.012036456

213

0.012093574

214

0.012150695

215

0.012207819

216

0.012264946

217

0.012322077

218

0.012379210

219

0.012436347

220

0.012493488

221

0.012550631

222

0.012607778

223

0.012664928

224

0.012722081

225

0.012779237

226

0.012836397

227

0.012893560

228

0.012950726

229

0.013007895

230

0.013065067

231

0.013122243

232

0.013179422

233

0.013236604

234

0.013293790

235

0.013350978

236

0.013408170

237

0.013465365

238

0.013522564

239

0.013579765

240

0.013636970

241

0.013694178

242

0.013751389

243

0.013808604

244

0.013865821

245

0.013923042

246

0.013980266

247

0.014037494

248

0.014094724

249

0.014151958

250

0.014209195

251

0.014266436

252

0.014323679

253

0.014380926

254

0.014438176

255

0.014495429

256

0.014552686

257

0.014609945

258

0.014667208

259

0.014724474

260

0.014781744

261

0.014839016

262

0.014896292

263

0.014953571

264

0.015010854

265

0.015068139

266

0.015125428

267

0.015182720

268

0.015240015

269

0.015297314

270

0.015354615

271

0.015411920

272

0.015469228

273

0.015526540

274

0.015583854

275

0.015641172

276

0.015698493

277

0.015755818

278

0.015813145

279

0.015870476

280

0.015927810

281

0.015985148

282

0.016042488

283

0.016099832

284

0.016157179

285

0.016214529

286

0.016271883

287

0.016329239

288

0.016386599

289

0.016443962

290

0.016501329

291

0.016558699

292

0.016616071

293

0.016673448

294

0.016730827

295

0.016788210

296

0.016845595

297

0.016902985

298

0.016960377

299

0.017017772

300

0.017075171

301

0.017132573

302

0.017189979

303

0.017247387

304

0.017304799

305

0.017362214

306

0.017419632

307

0.017477054

308

0.017534478

309

0.017591906

310

0.017649338

311

0.017706772

312

0.017764210

313

0.017821651

314

0.017879095

315

0.017936542

316

0.017993993

317

0.018051447

318

0.018108904

319

0.018166364

320

0.018223828

321

0.018281295

322

0.018338765

323

0.018396238

324

0.018453715

325

0.018511195

326

0.018568678

327

0.018626164

328

0.018683654

329

0.018741147

330

0.018798643

331

0.018856142

332

0.018913645

333

0.018971151

334

0.019028660

335

0.019086172

336

0.019143687

337

0.019201206

338

0.019258728

339

0.019316254

340

0.019373782

341

0.019431314

342

0.019488849

343

0.019546387

344

0.019603929

345

0.019661473

346

0.019719021

347

0.019776573

348

0.019834127

349

0.019891685

350

0.019949246

351

0.020006810

352

0.020064378

353

0.020121949

354

0.020179523

355

0.020237100

356

0.020294680

357

0.020352264

358

0.020409851

359

0.020467441

360

0.020525035

361

0.020582632

362

0.020640232

363

0.020697835

364

0.020755441

365

0.020813051

366

0.020870664

367

0.020928280

368

0.020985900

369

0.021043523

370

0.021101149

371

0.021158778
DOCUMENT ATTRIBUTES
  • Institutional Authors
    Internal Revenue Service
  • Code Sections
  • Subject Areas/Tax Topics
  • Jurisdictions
  • Tax Analysts Document Number
    2018-48009
  • Tax Analysts Electronic Citation
    2018 TNT 237-41
    2018 TPR 51-17
Copy RID