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

NOV. 23, 2020

Rev. Rul. 2020-25; 2020-48 IRB 1109

DATED NOV. 23, 2020
DOCUMENT ATTRIBUTES
  • Institutional Authors
    Internal Revenue Service
  • Code Sections
  • Subject Areas/Tax Topics
  • Jurisdictions
  • Tax Analysts Document Number
    2020-46009
  • Tax Analysts Electronic Citation
    2020 TNTG 227-29
    2020 TNTF 227-26
    2020 TPR 48-8
Citations: Rev. Rul. 2020-25; 2020-48 IRB 1109

Section 995. — Taxation of DISC Income to Shareholders

2020 Base Period T-Bill Rate. The “base period T-bill rate” for the period ending September 30, 2020, is published as required by section 995(f) of the Internal Revenue Code

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 of 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, 2020, is 0.73 percent.

Pursuant to section 6622 of the Internal Revenue Code, interest must be compounded daily. The table below provides factors for compounding the 2020 base period T-bill rate daily for any number of days in the shareholder's taxable year (including for a 52-53 week taxable year). 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. 2019-27, 2019-51 I.R.B. 1378; Rev. Rul. 2018-31, 2018-50 I.R.B. 848; Rev. Rul. 2017-23, 2017-49 I.R.B. 546; Rev. Rul. 2017-01, 2017-03 I.R.B. 377; and Rev. Rul. 2015-26, 2015-49 I.R.B. 696.

DRAFTING INFORMATION

The principal author of this revenue ruling is Kathleen C. Arsenault of the Office of Associate Chief Counsel (International). For further information regarding the revenue ruling, contact Ms. Arsenault at (202) 317-3800 (not a toll-free number).

ANNUAL RATE,  COMPOUNDED DAILY
0.73 PERCENT

DAYS

FACTOR

1

0.000019945

2

0.000039891

3

0.000059837

4

0.000079784

5

0.000099731

6

0.000119678

7

0.000139626

8

0.000159574

9

0.000179523

10

0.000199471

11

0.000219421

12

0.000239371

13

0.000259321

14

0.000279271

15

0.000299222

16

0.000319173

17

0.000339125

18

0.000359077

19

0.000379030

20

0.000398983

21

0.000418936

22

0.000438890

23

0.000458844

24

0.000478798

25

0.000498753

26

0.000518709

27

0.000538664

28

0.000558620

29

0.000578577

30

0.000598534

31

0.000618491

32

0.000638449

33

0.000658407

34

0.000678365

35

0.000698324

36

0.000718283

37

0.000738243

38

0.000758203

39

0.000778164

40

0.000798125

41

0.000818086

42

0.000838048

43

0.000858010

44

0.000877972

45

0.000897935

46

0.000917898

47

0.000937862

48

0.000957826

49

0.000977790

50

0.000997755

51

0.001017720

52

0.001037686

53

0.001057652

54

0.001077619

55

0.001097586

56

0.001117553

57

0.001137520

58

0.001157488

59

0.001177457

60

0.001197426

61

0.001217395

62

0.001237365

63

0.001257335

64

0.001277305

65

0.001297276

66

0.001317247

67

0.001337219

68

0.001357191

69

0.001377163

70

0.001397136

71

0.001417109

72

0.001437083

73

0.001457057

74

0.001477031

75

0.001497006

76

0.001516981

77

0.001536957

78

0.001556933

79

0.001576909

80

0.001596886

81

0.001616863

82

0.001636841

83

0.001656819

84

0.001676797

85

0.001696776

86

0.001716755

87

0.001736735

88

0.001756715

89

0.001776695

90

0.001796676

91

0.001816657

92

0.001836639

93

0.001856621

94

0.001876603

95

0.001896586

96

0.001916569

97

0.001936553

98

0.001956537

99

0.001976521

100

0.001996506

101

0.002016491

102

0.002036477

103

0.002056463

104

0.002076449

105

0.002096436

106

0.002116423

107

0.002136411

108

0.002156399

109

0.002176387

110

0.002196376

111

0.002216365

112

0.002236354

113

0.002256344

114

0.002276335

115

0.002296325

116

0.002316317

117

0.002336308

118

0.002356300

119

0.002376293

120

0.002396285

121

0.002416278

122

0.002436272

123

0.002456266

124

0.002476260

125

0.002496255

126

0.002516250

127

0.002536246

128

0.002556242

129

0.002576238

130

0.002596235

131

0.002616232

132

0.002636229

133

0.002656227

134

0.002676226

135

0.002696224

136

0.002716224

137

0.002736223

138

0.002756223

139

0.002776223

140

0.002796224

 

 

141

0.002816225

142

0.002836227

143

0.002856229

144

0.002876231

145

0.002896234

146

0.002916237

147

0.002936240

148

0.002956244

149

0.002976249

150

0.002996253

151

0.003016258

152

0.003036264

153

0.003056270

154

0.003076276

155

0.003096283

156

0.003116290

157

0.003136297

158

0.003156305

159

0.003176314

160

0.003196322

161

0.003216331

162

0.003236341

163

0.003256351

164

0.003276361

165

0.003296372

166

0.003316383

167

0.003336395

168

0.003356406

169

0.003376419

170

0.003396431

171

0.003416445

172

0.003436458

173

0.003456472

174

0.003476486

175

0.003496501

176

0.003516516

177

0.003536531

178

0.003556547

179

0.003576564

180

0.003596580

181

0.003616597

182

0.003636615

183

0.003656633

184

0.003676651

185

0.003696670

186

0.003716689

187

0.003736708

188

0.003756728

189

0.003776749

190

0.003796769

191

0.003816790

192

0.003836812

193

0.003856834

194

0.003876856

195

0.003896879

196

0.003916902

197

0.003936925

198

0.003956949

199

0.003976973

200

0.003996998

201

0.004017023

202

0.004037049

203

0.004057074

204

0.004077101

205

0.004097127

206

0.004117154

207

0.004137182

208

0.004157210

209

0.004177238

210

0.004197267

211

0.004217296

212

0.004237325

213

0.004257355

214

0.004277385

215

0.004297416

216

0.004317447

217

0.004337479

218

0.004357511

219

0.004377543

220

0.004397575

221

0.004417609

222

0.004437642

223

0.004457676

224

0.004477710

225

0.004497745

226

0.004517780

227

0.004537815

228

0.004557851

229

0.004577887

230

0.004597924

231

0.004617961

232

0.004637999

233

0.004658036

234

0.004678075

235

0.004698113

236

0.004718152

237

0.004738192

238

0.004758232

239

0.004778272

240

0.004798313

241

0.004818354

242

0.004838395

243

0.004858437

244

0.004878479

245

0.004898522

246

0.004918565

247

0.004938609

248

0.004958652

249

0.004978697

250

0.004998741

251

0.005018786

252

0.005038832

253

0.005058878

254

0.005078924

255

0.005098971

256

0.005119018

257

0.005139065

258

0.005159113

259

0.005179161

260

0.005199210

261

0.005219259

262

0.005239308

263

0.005259358

264

0.005279408

265

0.005299459

266

0.005319510

267

0.005339562

268

0.005359613

269

0.005379666

270

0.005399718

271

0.005419771

272

0.005439825

273

0.005459879

274

0.005479933

275

0.005499988

276

0.005520043

277

0.005540098

278

0.005560154

279

0.005580210

280

0.005600267

281

0.005620324

282

0.005640381

283

0.005660439

284

0.005680498

285

0.005700556

286

0.005720615

287

0.005740675

288

0.005760735

289

0.005780795

290

0.005800856

291

0.005820917

292

0.005840978

293

0.005861040

294

0.005881102

295

0.005901165

296

0.005921228

297

0.005941291

298

0.005961355

299

0.005981419

300

0.006001484

301

0.006021549

302

0.006041615

303

0.006061680

304

0.006081747

305

0.006101813

306

0.006121880

307

0.006141948

308

0.006162016

309

0.006182084

310

0.006202153

311

0.006222222

312

0.006242291

313

0.006262361

314

0.006282431

315

0.006302502

316

0.006322573

317

0.006342644

318

0.006362716

319

0.006382789

320

0.006402861

321

0.006422934

322

0.006443008

323

0.006463082

324

0.006483156

325

0.006503231

326

0.006523306

327

0.006543381

328

0.006563457

329

0.006583533

330

0.006603610

331

0.006623687

332

0.006643764

333

0.006663842

334

0.006683921

335

0.006703999

336

0.006724078

337

0.006744158

338

0.006764238

339

0.006784318

340

0.006804399

341

0.006824480

342

0.006844561

343

0.006864643

344

0.006884725

345

0.006904808

346

0.006924891

347

0.006944974

348

0.006965058

349

0.006985143

350

0.007005227

351

0.007025312

352

0.007045398

353

0.007065484

354

0.007085570

355

0.007105657

356

0.007125744

357

0.007145831

358

0.007165919

359

0.007186007

360

0.007206096

361

0.007226185

362

0.007246275

363

0.007266365

364

0.007286455

365

0.007306546

366

0.007326637

367

0.007346728

368

0.007366820

369

0.007386912

370

0.007407005

371

0.007427098
DOCUMENT ATTRIBUTES
  • Institutional Authors
    Internal Revenue Service
  • Code Sections
  • Subject Areas/Tax Topics
  • Jurisdictions
  • Tax Analysts Document Number
    2020-46009
  • Tax Analysts Electronic Citation
    2020 TNTG 227-29
    2020 TNTF 227-26
    2020 TPR 48-8
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