The Internal Revenue Service has announced that it is lowering the interest rates for the fourth quarter of 2011 (October through December). The interest rate for over-payments will be two percent for individuals and three percent for corporations. The interest rate for under-payments is now three percent for individual and five percent for corporations. The rate for over-payments exceeding $10,000 has dropped to half a percent.

The new rates represent a one point drop from their current levels. The IRS uses the federal short-term rate to determine its rates. If you have any questions about how this will affect your situation you should contact your tax preparer.