Income Taxes

9 Months Ended

Sep. 30, 2012

Income Tax [Abstract]

Income Taxes [Text Block]

7. Income Taxes

Internal Revenue Service (IRS) examinations have been completed and settled for all years prior to 1999, although some interest calculations remain open for years prior to 1999. The IRS has completed its examinations and issued notices of deficiency for tax years 1999 through 2008. We disagree with many of their proposed adjustments, and we are at IRS Appeals for these years. Additionally, several state tax authorities are examining our state income tax returns for years 2003 through 2010.

In the third quarter of 2011, we reached an agreement in principle with the IRS to resolve all of the issues related to tax years 1999 through 2004, except for calculations of interest. We anticipate we will have a final closing agreement with the IRS within the next 12 months. Once executed, this agreement should result in an immaterial reduction of income tax expense.

At September 30, 2012, our liability for unrecognized tax benefits was $115 million. We classified $32 million of this amount as current, the majority of which is in anticipation of a final settlement for tax years 1999 through 2004.