|
Income Taxes
|
6 Months Ended |
|---|---|
|
Jun. 30, 2011
|
|
| Income Taxes [Abstract] | |
| Income Taxes [Text Block] | 7. Income Taxes
Internal Revenue Service (IRS) examinations have been completed and settled for all years prior to 1999, and the statute of limitations bars any additional tax assessments. Interest calculations may remain open for years prior to 1999. The IRS has completed its examinations and issued notices of deficiency for tax years 1999 through 2006. We disagree with many of their proposed adjustments, and we are at IRS Appeals for these years. During the second quarter of 2011, the IRS completed its examination and issued a notice of deficiency for tax years 2007 and 2008. We disagree with many of their proposed adjustments, and will contest the adjustments through the IRS Appeals process and potentially through litigation. We anticipate a partial settlement of the tax years 1999 through 2004 in the next 12 months. Several state tax authorities are examining our state income tax returns for tax years 2003 through 2006.
Based on the IRS's examination report for tax years 2007 and 2008, we increased our liability for uncertain tax benefits from $86 million at December 31, 2010, to $149 million at June 30, 2011. Most of this increase is a reclassification from our deferred income tax liability. Of the $149 million, we have classified $78 million as current in anticipation of a partial settlement in the next 12 months for tax years 1999 through 2004.
In February 2011, Arizona enacted legislation that will decrease the state's corporate tax rate. This reduced our deferred tax expense by $14 million in the first quarter of 2011.
|