IRC §6601 · 26 U.S.C. §6601
IRC §6601: Interest on Underpayments
IRC §6601 charges interest on underpaid tax from the due date — the federal rate plus three points, compounding daily, on tax and penalties alike. The meter that never negotiates.
Watch: Section 6601 in 32 seconds.
What it governs
- Federal short-term rate plus 3 points, reset quarterly, compounding daily
- Runs from the original due date — extensions to file are not extensions to pay
- Applies to tax and to penalties from their own assessment dates
- Abates only for IRS error or unreasonable delay — never for sympathy
Related sectionsIRC §6651 — the penalties interest stacks onto · IRC §6654 — the estimated-tax cousin of §6601
From the practiceStart the consultation — Paul on video, one question at a time →
Questions this section answers
- What is the current underpayment interest rate?
- The federal short-term rate plus three percentage points, reset every quarter — typically high single digits in recent years. It compounds daily on the full balance including penalties. Check the IRS quarterly release for the exact figure.
- Can interest be abated?
- Only for IRS error or unreasonable managerial delay — a lost payment, a misapplied credit, a file left to rot. Financial hardship, reliance on advice, and honest mistakes abate penalties, never interest. Interest is rent on the money, not punishment.
- Does an extension stop interest?
- No — Form 4868 extends the filing deadline, not the payment deadline. Interest runs from April 15 on any unpaid balance regardless. Pay an estimate with the extension or the meter starts on time.
The whole Code, one volume.
The Guide treats 149 Code sections across 24 chapters — every claim verified against primary sources.
Get the Guide — $299
The Guide treats 149 Code sections across 24 chapters — every claim verified against primary sources.
Get the Guide — $299