Interest is a charge for the time value of money.
Over the years, the penalty and interest provisions in the Internal Revenue Code of 1986, have become increasingly complicated and in some cases dysfunctional. Mindful it could not enact a comprehensive reform of the penalty and interest regime during the consideration of the Restructuring Act, Congress required the Treasury Department and the staff of the Joint Committee on Taxation to each conduct studies on the administration of penalties and interest in the Code. The studies were due by July 22, 1999. The Joint Tax penalty and interest study included an analysis and recommendations relating to corporate tax shelters. The purpose of the Finance Committee hearings is to discuss the Treasury and Joint Tax penalty and interest studies and recommendations.