SECTION 5. EXAMPLES

.01 Example 1. X is a calendar year corporation. The Service examined X ’s Form 1120, Corporation Income Tax Return, for the 1992 and 1994 taxable years. For the 1994 taxable year, the Service determined that X was entitled to a refund of $30,000. This Service-initiated refund was made on September 21, 1997, with interest computed from March 15, 1995, to July 29, 1997. For the 1992 taxable year, the Service determined that X underpaid its income tax by $80,000. The Service sent X a notice and demand for payment dated May 3, 1998, which X paid on May 12, 1998, with interest computed from March 15, 1993, to May 3, 1998. On April 27, 1999, X filed a Form 843 requesting the application of § 6621(d) for the overlap period from March 15, 1995, to July 29, 1997. On July 22, 1998, both the 6-year period of limitation for claiming additional overpayment interest on X ’s 1997 refund and the 2-year period of limitation for claiming a refund of underpayment interest paid in 1998 were open. X will be refunded the difference between the underpayment interest paid on $30,000 for the period from March 15, 1995, to July 29, 1997, and the overpayment interest computed and paid on $30,000 for that period.

.02 Example 2. The facts are the same as in Ex- ample 1, except that the Service sent X a notice and demand for payment dated May 3, 1996, which X paid on May 12, 1996, with interest computed from March 15, 1993, to May 3, 1996. On April 27, 1999, X filed a Form 843 requesting the application of § 6621(d) for the overlap period from March 15, 1995, to May 3, 1996. On July 22, 1998, the 6-year period of limitation for claiming additional overpayment interest on X ’s 1997 refund was open, but the 2-year period of limitation for claiming a refund of underpayment interest paid in 1996 was not open. Therefore, the net interest rate of zero under § 6621(d) does not apply to the overlap period and no adjustment will be made.