Income Taxes

12 Months Ended

Dec. 31, 2011

Income Taxes

(5) INCOME TAXES

Income Tax Expense (Benefit) - The components of "Income tax expense (benefit)" in the Consolidated Statements of Income were as follows (in millions):

	Alliant Energy									IPL									WPL
	2011			2010			2009			2011			2010			2009			2011			2010			2009
Current tax expense (benefit):
Federal	$	53.3		$	3.4		($	141.2	)	$	54.5			($22.4	)		($59.5	)		($4.3	)	$	26.8		($	137.7	)
State		14.0			9.8			(4.4	)		20.0			(7.6	)		5.9			(7.1	)		14.7			(14.3	)
IPL's tax benefit rider		(35.9	)		—			—			(35.9	)		—			—			—			—			—
Deferred tax expense (benefit):
Federal		92.6			167.7			135.8			(11.6	)		100.9			110.3			111.3			63.3			153.6
State		(17.5	)		4.8			(38.9	)		(16.4	)		(2.8	)		(35.6	)		19.0			6.6			9.3
Production tax credits		(27.1	)		(11.2	)		(4.7	)		(12.3	)		(7.7	)		(0.8	)		(14.8	)		(3.5	)		(3.9	)
Investment tax credits		(1.8	)		(1.8	)		(1.9	)		(0.6	)		(0.6	)		(0.6	)		(1.2	)		(1.2	)		(1.3	)
Provision recorded as a change in uncertain tax positions:
Current		16.3			(84.0	)		47.1			16.6			(41.1	)		7.0			(0.3	)		(41.7	)		39.7
Deferred		(38.3	)		59.6			—			(17.6	)		26.2			—			(20.7	)		33.3			—
Provision recorded as a change in accrued interest		(0.5	)		(3.1	)		(1.1	)		(0.3	)		(2.6	)		0.3			—			—			0.4
	$	55.1		$	145.2			($9.3	)		($3.6	)	$	42.3		$	27.0		$	81.9		$	98.3		$	45.8

Income Tax Rates - The overall income tax rates shown in the following table were computed by dividing income tax expense (benefit) by income from continuing operations before income taxes.

	Alliant Energy									IPL									WPL
	2011			2010			2009			2011			2010			2009			2011			2010			2009
Statutory federal income tax rate		35.0	%		35.0	%		35.0	%		35.0	%		35.0	%		35.0	%		35.0	%		35.0	%		35.0	%
State income taxes, net of federal benefits		4.3			4.7			7.8			4.3			4.1			5.6			5.0			5.1			4.5
Adjustment of prior period taxes		0.5			0.2			(6.2	)		1.7			(1.8	)		(5.4	)		—			2.0			0.7
IPL's tax benefit rider		(9.6	)		—			—			(26.5	)		—			—			—			—			—
Production tax credits		(7.2	)		(2.5	)		(3.9	)		(9.1	)		(4.1	)		(0.5	)		(6.0	)		(1.4	)		(2.9	)
Wisconsin Tax Legislation		(5.0	)		—			—			—			—			—			—			—			—
Effect of rate making on property related differences:
Federal		(0.1	)		(1.1	)		(2.4	)		0.5			(1.3	)		(1.0	)		(0.4	)		(1.0	)		(0.8	)
State		(2.1	)		(3.2	)		(2.4	)		(5.8	)		(7.6	)		(1.6	)		(0.1	)		(0.1	)		(0.1	)
Federal Health Care Legislation		—			1.6			—			—			2.0			—			—			1.2			—
State filing changes		—			—			(33.8	)		—			—			(18.2	)		—			—			(1.8	)
Other items, net		(1.1	)		(2.7	)		(1.9	)		(2.8	)		(3.5	)		1.1			(0.1	)		(1.6	)		(0.7	)
Overall income tax rate		14.7	%		32.0	%		(7.8	%)		(2.7	%)		22.8	%		15.0	%		33.4	%		39.2	%		33.9	%

Adjustment of prior period taxes - In 2010, the IRS completed the audits of Alliant Energy's U.S. federal income tax returns for calendar years 2005 through 2008. The net impact of the completion of these audits and reversal of reserves for uncertain tax positions related to those audits resulted in Alliant Energy and IPL recognizing net income tax benefits in 2010 of $7 million and $5 million, respectively. These income tax benefits decreased Alliant Energy's and IPL's effective tax rate by 1.4% and 2.7%, respectively, and are included, along with other adjustments, in "Adjustment of prior period taxes" in the 2010 column of the above table. The net impact of the completion of the 2005 through 2008 audits and reversal of reserves for uncertain tax positions related to these audits did not have a material impact on WPL's income tax rates for 2010.

IPL's tax benefit rider - In January 2011, the IUB approved a tax benefit rider proposed by IPL, which utilizes tax-related regulatory liabilities to credit bills of Iowa retail electric customers beginning in February 2011 to help offset the impact of the recent rate increases on such customers. These regulatory liabilities are related to tax benefits from tax accounting method changes for repairs, mixed service costs and allocation of insurance proceeds from the floods in 2008. Alliant Energy's and IPL's effective tax rates in 2011 include the impact of reducing income tax expense with offsetting reductions to regulatory liabilities as a result of implementing the tax benefit rider. Refer to Note 1(b) for additional details of IPL's tax benefit rider.

Production tax credits - Alliant Energy, IPL and WPL earn production tax credits from the wind projects they own and operate. Production tax credits are based on the electricity generated by each wind project during the first 10 years of operations. Alliant Energy has three wind projects that are currently generating production tax credits: WPL's 68 MW Cedar Ridge wind project, which began generating electricity in late 2008; IPL's 200 MW Whispering Willow - East wind project, which began generating electricity in late 2009; and WPL's 200 MW Bent Tree - Phase I wind project, which began generating electricity in late 2010. Production tax credits (net of state tax impacts) resulting from these wind projects were as follows (in millions):

	Alliant Energy							IPL						WPL
	2011		2010			2009		2011		2010		2009		2011		2010			2009
Whispering Willow - East (IPL)	$	12.3	$	7.7		$	0.8	$	12.3	$	7.7	$	0.8	$	—	$	—		$	—
Bent Tree - Phase I (WPL) (a)		9.3		1.2			—		—		—		—		9.3		1.2			—
Cedar Ridge (WPL)		4.5		3.3			3.9		—		—		—		4.5		3.3			3.9
		26.1		12.2			4.7		12.3		7.7		0.8		13.8		4.5			3.9
Deferral (a)		1.0		(1.0	)		—		—		—		—		1.0		(1.0	)		—
	$	27.1	$	11.2		$	4.7	$	12.3	$	7.7	$	0.8	$	14.8	$	3.5		$	3.9

(a) In accordance with its December 2009 order, the PSCW authorized WPL to defer the retail portion of the production tax credits generated from its Bent Tree - Phase I wind project in 2010. As a result of a regulatory assessment completed in 2011, the retail portion of the production tax credit deferral was reversed.

Wisconsin tax legislation - In June 2011, the 2011 Wisconsin Act 32 (Act 32) was enacted. The most significant provision of Act 32 for Alliant Energy authorizes combined groups to share net operating loss carryforwards that were incurred by group members prior to Jan. 1, 2009 and utilize these shared net operating losses over 20 years beginning after Dec. 31, 2011. Based on this provision of Act 32, Alliant Energy now anticipates its Wisconsin combined group will be able to fully utilize $368 million of Wisconsin net operating losses incurred by Alliant Energy and Resources prior to Jan. 1, 2009 to offset future taxable income and therefore reversed previously recorded deferred tax asset valuation allowances related to state net operating loss carryforwards of $19 million in 2011.

Effect of rate making on property related differences - Alliant Energy's and IPL's state income taxes are impacted by certain property related differences at IPL for which deferred tax is not recorded in the income statement pursuant to Iowa rate making principles. The primary factor contributing to this impact on state taxes was tax depreciation related to IPL's Whispering Willow - East wind project, which was placed into service in late 2009 and resulted in a decrease in state taxes for Alliant Energy and IPL of approximately $6 million, $12 million and $2 million in 2011, 2010 and 2009, respectively.

Federal health care legislation - In 2010, the Patient Protection and Affordable Care Act, and Health Care and Education Reconciliation Act of 2010 (Federal Health Care Legislation) were enacted. One of the most significant provisions of the Federal Health Care Legislation for Alliant Energy, IPL and WPL requires a reduction in their tax deductions for retiree health care costs beginning in 2013, to the extent their drug expenses are reimbursed under the Medicare Part D retiree drug subsidy program. The reduction in the future deductibility of retiree health care costs accrued as of Dec. 31, 2009 required Alliant Energy, IPL and WPL to record deferred income tax expense of $7 million, $4 million and $3 million, respectively, in 2010.

State filing changes - In 2009, the Wisconsin Senate Bill 62 (SB 62) was enacted. The most significant provision of SB 62 for Alliant Energy, IPL and WPL required combined reporting for corporate income taxation in Wisconsin beginning with tax returns filed for the calendar year 2009. This provision requires all legal entities in which Alliant Energy owns a 50% or more interest to file as members of a unitary return in Wisconsin. As a result of this provision in SB 62 and in order to take advantage of efficiencies that may be available as a result of IPL and WPL sharing resources and facilities, WPL filed as a member of Iowa consolidated tax returns beginning with calendar year 2009. Changes in state apportioned income tax rates resulting from Wisconsin combined reporting requirements and WPL's plans to be included in Iowa consolidated tax returns required Alliant Energy, IPL and WPL to adjust the carrying value of their deferred income tax assets and liabilities in 2009. The provisions of SB 62 initially made it unlikely that Alliant Energy would be able to utilize the majority of its current Wisconsin net operating loss carryforwards before they expire resulting in additional valuation allowances in 2009. Alliant Energy, IPL and WPL recognized net income tax benefits in 2009 of $40 million, $33 million and $2 million, respectively, from the changes in state apportioned income tax rates and additional valuation allowances. Refer to "Wisconsin tax legislation" above for changes to Alliant Energy's assumptions regarding the utilization of state net operating loss carryforwards and related reversal of valuation allowances in 2011 as a result of a Wisconsin tax law change.

Deferred Tax Assets and Liabilities - Consistent with rate making treatment, deferred taxes are offset in the tables below for temporary differences that have related regulatory assets and regulatory liabilities. The deferred income tax (assets) and liabilities included on Alliant Energy's Consolidated Balance Sheets at Dec. 31 arise from the following temporary differences (in millions):

	2011								2010
	Deferred Tax Assets			Deferred Tax Liabilities		Net			Deferred Tax Assets			Deferred Tax Liabilities		Net
Property	$	—		$	1,926.4	$	1,926.4		$	—		$	1,419.8	$	1,419.8
Investment in ATC		—			93.8		93.8			—			83.9		83.9
Pension and other postretirement benefits obligations		—			91.9		91.9			—			51.1		51.1
Deferred portion of tax gain on IPL's electric transmission assets sale		—			75.5		75.5			—			100.3		100.3
Regulatory liability - DAEC sale		(2.5	)		—		(2.5	)		(13.7	)		—		(13.7	)
Customer advances		(13.7	)		—		(13.7	)		(15.0	)		—		(15.0	)
Regulatory liability - IPL's electric transmission assets sale		(15.6	)		—		(15.6	)		(27.2	)		—		(27.2	)
Net operating losses carryforward - state		(39.9	)		—		(39.9	)		(19.2	)		—		(19.2	)
Regulatory liability - mixed service costs deduction		(66.7	)		—		(66.7	)		—			—		—
Regulatory liability - repairs expenditures		(71.8	)		—		(71.8	)		(60.9	)		—		(60.9	)
Federal credit carryforward		(107.4	)		—		(107.4	)		(79.8	)		—		(79.8	)
Net operating losses carryforward - federal		(336.1	)		—		(336.1	)		(93.7	)		—		(93.7	)
Other		(98.5	)		132.8		34.3			(98.1	)		146.8		48.7
Subtotal		(752.2	)		2,320.4		1,568.2			(407.6	)		1,801.9		1,394.3
Valuation allowances (a)		1.2			—		1.2			18.5			—		18.5
		($751.0	)	$	2,320.4	$	1,569.4			($389.1	)	$	1,801.9	$	1,412.8

	2011			2010
Other current assets		($22.8	)		($21.5	)
Deferred income taxes		1,592.2			1,434.3
Total deferred tax liabilities	$	1,569.4		$	1,412.8

(a) Refer to "Wisconsin tax legislation" above for discussion of the reversal of valuation allowances related to state net operating loss carryforwards in 2011 as a result of a Wisconsin tax law change.

The deferred income tax (assets) and liabilities included on IPL's Consolidated Balance Sheets at Dec. 31 arise from the following temporary differences (in millions):

	2011								2010
	Deferred Tax Assets			Deferred Tax Liabilities		Net			Deferred Tax Assets			Deferred Tax Liabilities		Net
Property	$	—		$	1,134.1	$	1,134.1		$	—		$	850.5	$	850.5
Deferred portion of tax gain on electric transmission assets sale		—			75.5		75.5			—			100.3		100.3
Pension and other postretirement benefits obligations		—			67.6		67.6			—			43.9		43.9
Regulatory liability - flood insurance		(2.1	)		—		(2.1	)		(16.8	)		—		(16.8	)
Regulatory liability - DAEC sale		(2.5	)		—		(2.5	)		(13.7	)		—		(13.7	)
Net operating losses carryforward - state (a)		(12.5	)		—		(12.5	)		(0.2	)		—		(0.2	)
Regulatory liability - electric transmission assets sale		(15.6	)		—		(15.6	)		(27.2	)		—		(27.2	)
Federal credit carryforward (a)		(25.0	)		—		(25.0	)		(12.4	)		—		(12.4	)
Regulatory liability - mixed service costs deduction		(66.7	)		—		(66.7	)		—			—		—
Regulatory liability - repairs expenditures		(71.8	)		—		(71.8	)		(60.9	)		—		(60.9	)
Net operating losses carryforward - federal (b)		(154.4	)		—		(154.4	)		(41.3	)		—		(41.3	)
Other		(45.9	)		42.7		(3.2	)		(40.9	)		54.5		13.6
		($396.5	)	$	1,319.9	$	923.4			($213.4	)	$	1,049.2	$	835.8

	2011			2010
Other current assets		($13.5	)		($13.2	)
Deferred income taxes		936.9			849.0
Total deferred tax liabilities	$	923.4		$	835.8

(a) Earliest expiration date is 2022.

(b) Earliest expiration date is 2030.

The deferred income tax (assets) and liabilities included on WPL's Consolidated Balance Sheets at Dec. 31 arise from the following temporary differences (in millions):

	2011								2010
	Deferred Tax Assets			Deferred Tax Liabilities		Net			Deferred Tax Assets			Deferred Tax Liabilities		Net
Property	$	—		$	697.1	$	697.1		$	—		$	494.8	$	494.8
Investment in ATC		—			93.8		93.8			—			83.9		83.9
Pension and other postretirement benefits obligations		—			49.6		49.6			—			32.1		32.1
Net operating losses carryforward - state (a)		(5.1	)		—		(5.1	)		—			—		—
Investment tax credits		(6.6	)		—		(6.6	)		(7.4	)		—		(7.4	)
Customer advances		(11.6	)		—		(11.6	)		(13.1	)		—		(13.1	)
Federal credit carryforward (a)		(26.1	)		—		(26.1	)		(11.5	)		—		(11.5	)
Net operating losses carryforward - federal (b)		(141.1	)		—		(141.1	)		(38.2	)		—		(38.2	)
Other		(17.6	)		34.1		16.5			(12.0	)		37.2		25.2
		($208.1	)	$	874.6	$	666.5			($82.2	)	$	648.0	$	565.8

	2011			2010
Other current assets		($6.0	)		($4.6	)
Deferred income taxes		672.5			570.4
Total deferred tax liabilities	$	666.5		$	565.8

(a) Earliest expiration date is 2022.

(b) Earliest expiration date is 2030.

Property - The increase in property-related deferred tax liabilities for Alliant Energy, IPL and WPL in the tables above were primarily due to temporary differences from bonus depreciation deductions available in 2011 and a change in the tax accounting method for mixed service cost deductions in 2011.

Bonus depreciation deductions - In 2010, the Small Business Jobs Act of 2010 (SBJA) and the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 (the Act) were enacted. The most significant provisions of the SBJA and the Act for Alliant Energy, IPL and WPL are related to the extension of bonus depreciation deductions for certain expenditures for property that are placed in service through Dec. 31, 2012. Based on capital projects placed into service in 2011, Alliant Energy currently estimates its total bonus depreciation deductions to be claimed in its 2011 federal income tax return will be approximately $572 million ($194 million for IPL and $334 million for WPL).

Mixed service costs deductions - In 2010, Alliant Energy filed a request with the IRS for a change in its tax accounting method for mixed service costs. In March 2011, Alliant Energy received consent from the IRS to reflect this change as part of its 2010 federal income tax return. The change allows Alliant Energy to currently deduct a portion of its mixed service costs, which have historically been capitalized for tax purposes. This change was applied retroactively to mixed service costs incurred since 1989. Alliant Energy recently completed an assessment of its eligible mixed service costs for the period from 1989 through 2010 and included $247 million ($141 million for IPL and $106 million for WPL) of mixed service costs deductions for these years in its 2010 federal income tax return.

Pension and other postretirement benefits obligations - The increase in pension and other postretirement benefits obligations for Alliant Energy, IPL and WPL in the tables above were primarily due to the employer contributions of $126 million, $61 million and $52 million, respectively, made to company-sponsored defined benefit pension and other postretirement benefits plans in 2011. These contributions are deductible on Alliant Energy's, IPL's and WPL's 2011 federal income tax returns.

Deferred portion of tax gain on IPL's electric transmission asset sale - Alliant Energy and IPL recognized a $527 million taxable gain upon the sale of IPL's electric transmission assets in 2007. Under the provisions of the 2005 Energy Tax Act, Alliant Energy and IPL deferred its income tax obligation associated with the taxable gain over an eight-year period, with one-eighth of the income tax obligation being paid in each of the years of 2007 through 2014.

Carryforwards - Alliant Energy's tax carryforwards and associated deferred tax assets and expiration dates at Dec. 31, 2011 were estimated as follows (in millions):

	Carryforward Amount			Deferred Tax Assets (a)			Earliest Expiration Date
Federal net operating losses	$	1,034		$	355		2030
Federal net operating losses offset - uncertain tax positions		(55	)		(19	)
Federal credits - alternative minimum tax		42			42		None
Federal credits - general business credits		67			65		2022
State net operating losses (b)		786			42		2014
State net operating losses offset - uncertain tax positions		(26	)		(2	)

(a) The amounts for IPL and WPL are included in the deferred tax (assets) and liabilities tables above.

(b) At Dec. 31, 2011, the state net operating losses carryforwards had expiration dates ranging from 2014 to 2031 with 99% expiring after 2020. Due to the uncertainty of the realization of state net operating losses tax carryforwards, Alliant Energy had valuation allowances of $1.2 million and $18.5 million as of Dec. 31, 2011 and 2010, respectively. Refer to "Wisconsin tax legislation" above for discussion of the reversal of valuation allowances related to state net operating loss carryforwards in 2011 as a result of a Wisconsin tax law change.

Uncertain Tax Positions - A reconciliation of the beginning and ending amounts of uncertain tax positions, excluding interest, is as follows (in millions):

	Alliant Energy									IPL									WPL
	2011			2010			2009			2011			2010			2009			2011			2010			2009
Balance, Jan. 1	$	66.7		$	101.7		$	14.0		$	33.0		$	58.4		$	9.4		$	33.7		$	42.1		$	2.5
Additions based on tax positions related to the current year		0.7			3.8			6.6			0.1			2.5			3.2			0.6			1.3			2.5
Reductions based on tax positions related to the current year		—			—			—			—			—			—			—			—			—
Additions for tax positions of prior years (a)		—			9.1			88.7			—			3.8			51.2			—			5.2			37.3
Reductions for tax positions of prior years (b)		(43.9	)		(31.8	)		(4.5	)		(22.2	)		(22.7	)		(4.1	)		(21.7	)		(8.0	)		(0.2	)
Settlements with taxing authorities		—			(16.1	)		(1.2	)		—			(9.0	)		—			—			(6.9	)		—
Lapse of statute of limitations		—			—			(1.9	)		—			—			(1.3	)		—			—			—
Balance, Dec. 31 (c)	$	23.5		$	66.7		$	101.7		$	10.9		$	33.0		$	58.4		$	12.6		$	33.7		$	42.1

(a) The additions for tax positions of prior years were related to positions taken by Alliant Energy, IPL and WPL on their federal and state tax returns related to the capitalization and dispositions of property.

(b) The reductions of tax positions of prior years during 2011 were related to guidance published by the IRS clarifying the treatment of repair expenditures for electric distribution property. The reductions of tax positions of prior years during 2010 were primarily related to deductions taken by Alliant Energy, IPL and WPL on their federal and state tax returns that were settled under audit for amounts less than the recorded amounts.

(c) At Dec. 31, 2011 and 2010, $10 million and $31 million, respectively, of uncertain tax positions balances for both Alliant Energy and IPL included amounts recorded in regulatory liability accounts.

	Alliant Energy						IPL						WPL
	Dec. 31,						Dec. 31,						Dec. 31,
	2011		2010		2009		2011		2010		2009		2011		2010		2009
Tax positions favorably impacting future effective tax rates for continuing operations	$	—	$	—	$	13.6	$	—	$	—	$	10.9	$	—	$	—	$	1.4
Interest accrued		0.4		0.7		5.0		0.4		0.7		2.8		—		—		2.1
Penalties accrued		—		—		—		—		—		—		—		—		—

Open tax years - Tax years that remain subject to examination by major jurisdictions are as follows:

	Open Years
Major Jurisdiction	Alliant Energy	IPL	WPL
Consolidated federal income tax returns (a)	2005-2010	2005-2010	2005-2010
Consolidated Iowa income tax returns (b)	2005-2010	2005-2010	2005-2010
Wisconsin income tax returns	2005-2008	N/A	2005-2008
Wisconsin combined tax returns	2009-2010	2009-2010	2009-2010

(a) 2005 through 2009 are effectively settled excluding deductions included in Alliant Energy's 2008 and 2009 federal income tax returns for repair expenditures. The statute of limitations for 2005 through 2008 has been extended to Dec. 31, 2012.

(b) 2005 through 2007 are open for federal audit adjustments only.

Reasonably possible changes to uncertain tax positions in 2012 - In 2012, statutes of limitations will expire for Alliant Energy's, IPL's and WPL's tax returns in multiple state jurisdictions. The expiration of the statutes of limitations is not anticipated to have any impact on Alliant Energy's, IPL's and WPL's uncertain tax positions in 2012. In 2010, the IRS completed the audits of Alliant Energy's U.S. federal income tax return for calendar years 2005 through 2008. In 2011, the IRS completed the audit of Alliant Energy's U.S. federal income tax return for calendar year 2009. The IRS audit of Alliant Energy's federal income tax return for calendar year 2010 is expected to be completed in 2012. Alliant Energy has agreed to all of the IRS' proposed adjustments for deductions and credits included in the 2005 through 2010 income tax returns with the exception of the deductions for the repair expenditures change in method of tax accounting included in Alliant Energy's 2008 through 2010 income tax returns. The IRS denied the full amount of the $503 million ($212 million for IPL and $291 million for WPL) of deductions for the repair expenditures included in Alliant Energy's 2008 through 2010 income tax returns given the absence of current IRS guidelines regarding this deduction. Alliant Energy is appealing the IRS' denial of these deductions. Uncertain tax positions for Alliant Energy, IPL and WPL may decrease within the next 12 months as a result of the expected issuance in 2012 of revenue procedures clarifying the treatment of repair expenditures for electric generation and gas distribution property. An estimate of the expected changes for 2012 cannot be determined at this time.

Regulatory Assets and Regulatory Liabilities - As a rate-regulated enterprise, deferred tax assets and liabilities in the normal course of business that are related to certain property at IPL are required to be passed on to customers through future rates (over a period exceeding 30 years for some generating plant differences) consistent with rate making practices in Iowa. In 2009, IPL recognized significant tax benefits as a result of a change in tax accounting method for repairs expenditures and the tax method for allocating flood insurance proceeds that were recorded as regulatory liabilities. In 2011, IPL recognized significant tax benefits as a result of a tax accounting method change for mixed service costs. IPL expects to refund tax benefits realized from expensing mixed service costs to its Iowa retail customers in the future through the tax benefit rider approved by the IUB. The tax benefits from the tax accounting method change for mixed service costs were recorded as increases to current and non-current regulatory liabilities of $32 million and $134 million, respectively, on Alliant Energy's and IPL's Consolidated Balance Sheets in 2011. Alliant Energy and IPL also recorded an increase to their non-current regulatory assets of $166 million in 2011 to reflect the benefit IPL expects to receive from its Iowa retail customers in the future as the temporary differences associated with the mixed service costs reverse into current tax expense.

Other Income Tax Matters - Alliant Energy files a consolidated federal income tax return, which includes the aggregate taxable income or loss of Alliant Energy and its subsidiaries. In addition, a combined return including Alliant Energy and all of its subsidiaries is filed in Wisconsin. Alliant Energy subsidiaries with a presence in Iowa file as part of a consolidated return in Iowa. Under the terms of a tax sharing agreement between Alliant Energy and its subsidiaries, the subsidiaries calculate state income tax using consolidated apportionment rates applied to separate company taxable income. In 2011, 2010 and 2009, Alliant Energy's, IPL's and WPL's foreign sources of income were not material.

IPL [Member]

Income Taxes

(5) INCOME TAXES

Income Tax Expense (Benefit) - The components of "Income tax expense (benefit)" in the Consolidated Statements of Income were as follows (in millions):

	Alliant Energy									IPL									WPL
	2011			2010			2009			2011			2010			2009			2011			2010			2009
Current tax expense (benefit):
Federal	$	53.3		$	3.4		($	141.2	)	$	54.5			($22.4	)		($59.5	)		($4.3	)	$	26.8		($	137.7	)
State		14.0			9.8			(4.4	)		20.0			(7.6	)		5.9			(7.1	)		14.7			(14.3	)
IPL's tax benefit rider		(35.9	)		—			—			(35.9	)		—			—			—			—			—
Deferred tax expense (benefit):
Federal		92.6			167.7			135.8			(11.6	)		100.9			110.3			111.3			63.3			153.6
State		(17.5	)		4.8			(38.9	)		(16.4	)		(2.8	)		(35.6	)		19.0			6.6			9.3
Production tax credits		(27.1	)		(11.2	)		(4.7	)		(12.3	)		(7.7	)		(0.8	)		(14.8	)		(3.5	)		(3.9	)
Investment tax credits		(1.8	)		(1.8	)		(1.9	)		(0.6	)		(0.6	)		(0.6	)		(1.2	)		(1.2	)		(1.3	)
Provision recorded as a change in uncertain tax positions:
Current		16.3			(84.0	)		47.1			16.6			(41.1	)		7.0			(0.3	)		(41.7	)		39.7
Deferred		(38.3	)		59.6			—			(17.6	)		26.2			—			(20.7	)		33.3			—
Provision recorded as a change in accrued interest		(0.5	)		(3.1	)		(1.1	)		(0.3	)		(2.6	)		0.3			—			—			0.4
	$	55.1		$	145.2			($9.3	)		($3.6	)	$	42.3		$	27.0		$	81.9		$	98.3		$	45.8

Income Tax Rates - The overall income tax rates shown in the following table were computed by dividing income tax expense (benefit) by income from continuing operations before income taxes.

	Alliant Energy									IPL									WPL
	2011			2010			2009			2011			2010			2009			2011			2010			2009
Statutory federal income tax rate		35.0	%		35.0	%		35.0	%		35.0	%		35.0	%		35.0	%		35.0	%		35.0	%		35.0	%
State income taxes, net of federal benefits		4.3			4.7			7.8			4.3			4.1			5.6			5.0			5.1			4.5
Adjustment of prior period taxes		0.5			0.2			(6.2	)		1.7			(1.8	)		(5.4	)		—			2.0			0.7
IPL's tax benefit rider		(9.6	)		—			—			(26.5	)		—			—			—			—			—
Production tax credits		(7.2	)		(2.5	)		(3.9	)		(9.1	)		(4.1	)		(0.5	)		(6.0	)		(1.4	)		(2.9	)
Wisconsin Tax Legislation		(5.0	)		—			—			—			—			—			—			—			—
Effect of rate making on property related differences:
Federal		(0.1	)		(1.1	)		(2.4	)		0.5			(1.3	)		(1.0	)		(0.4	)		(1.0	)		(0.8	)
State		(2.1	)		(3.2	)		(2.4	)		(5.8	)		(7.6	)		(1.6	)		(0.1	)		(0.1	)		(0.1	)
Federal Health Care Legislation		—			1.6			—			—			2.0			—			—			1.2			—
State filing changes		—			—			(33.8	)		—			—			(18.2	)		—			—			(1.8	)
Other items, net		(1.1	)		(2.7	)		(1.9	)		(2.8	)		(3.5	)		1.1			(0.1	)		(1.6	)		(0.7	)
Overall income tax rate		14.7	%		32.0	%		(7.8	%)		(2.7	%)		22.8	%		15.0	%		33.4	%		39.2	%		33.9	%

Adjustment of prior period taxes - In 2010, the IRS completed the audits of Alliant Energy's U.S. federal income tax returns for calendar years 2005 through 2008. The net impact of the completion of these audits and reversal of reserves for uncertain tax positions related to those audits resulted in Alliant Energy and IPL recognizing net income tax benefits in 2010 of $7 million and $5 million, respectively. These income tax benefits decreased Alliant Energy's and IPL's effective tax rate by 1.4% and 2.7%, respectively, and are included, along with other adjustments, in "Adjustment of prior period taxes" in the 2010 column of the above table. The net impact of the completion of the 2005 through 2008 audits and reversal of reserves for uncertain tax positions related to these audits did not have a material impact on WPL's income tax rates for 2010.

IPL's tax benefit rider - In January 2011, the IUB approved a tax benefit rider proposed by IPL, which utilizes tax-related regulatory liabilities to credit bills of Iowa retail electric customers beginning in February 2011 to help offset the impact of the recent rate increases on such customers. These regulatory liabilities are related to tax benefits from tax accounting method changes for repairs, mixed service costs and allocation of insurance proceeds from the floods in 2008. Alliant Energy's and IPL's effective tax rates in 2011 include the impact of reducing income tax expense with offsetting reductions to regulatory liabilities as a result of implementing the tax benefit rider. Refer to Note 1(b) for additional details of IPL's tax benefit rider.

Production tax credits - Alliant Energy, IPL and WPL earn production tax credits from the wind projects they own and operate. Production tax credits are based on the electricity generated by each wind project during the first 10 years of operations. Alliant Energy has three wind projects that are currently generating production tax credits: WPL's 68 MW Cedar Ridge wind project, which began generating electricity in late 2008; IPL's 200 MW Whispering Willow - East wind project, which began generating electricity in late 2009; and WPL's 200 MW Bent Tree - Phase I wind project, which began generating electricity in late 2010. Production tax credits (net of state tax impacts) resulting from these wind projects were as follows (in millions):

	Alliant Energy							IPL						WPL
	2011		2010			2009		2011		2010		2009		2011		2010			2009
Whispering Willow - East (IPL)	$	12.3	$	7.7		$	0.8	$	12.3	$	7.7	$	0.8	$	—	$	—		$	—
Bent Tree - Phase I (WPL) (a)		9.3		1.2			—		—		—		—		9.3		1.2			—
Cedar Ridge (WPL)		4.5		3.3			3.9		—		—		—		4.5		3.3			3.9
		26.1		12.2			4.7		12.3		7.7		0.8		13.8		4.5			3.9
Deferral (a)		1.0		(1.0	)		—		—		—		—		1.0		(1.0	)		—
	$	27.1	$	11.2		$	4.7	$	12.3	$	7.7	$	0.8	$	14.8	$	3.5		$	3.9

(a) In accordance with its December 2009 order, the PSCW authorized WPL to defer the retail portion of the production tax credits generated from its Bent Tree - Phase I wind project in 2010. As a result of a regulatory assessment completed in 2011, the retail portion of the production tax credit deferral was reversed.

Wisconsin tax legislation - In June 2011, the 2011 Wisconsin Act 32 (Act 32) was enacted. The most significant provision of Act 32 for Alliant Energy authorizes combined groups to share net operating loss carryforwards that were incurred by group members prior to Jan. 1, 2009 and utilize these shared net operating losses over 20 years beginning after Dec. 31, 2011. Based on this provision of Act 32, Alliant Energy now anticipates its Wisconsin combined group will be able to fully utilize $368 million of Wisconsin net operating losses incurred by Alliant Energy and Resources prior to Jan. 1, 2009 to offset future taxable income and therefore reversed previously recorded deferred tax asset valuation allowances related to state net operating loss carryforwards of $19 million in 2011.

Effect of rate making on property related differences - Alliant Energy's and IPL's state income taxes are impacted by certain property related differences at IPL for which deferred tax is not recorded in the income statement pursuant to Iowa rate making principles. The primary factor contributing to this impact on state taxes was tax depreciation related to IPL's Whispering Willow - East wind project, which was placed into service in late 2009 and resulted in a decrease in state taxes for Alliant Energy and IPL of approximately $6 million, $12 million and $2 million in 2011, 2010 and 2009, respectively.

Federal health care legislation - In 2010, the Patient Protection and Affordable Care Act, and Health Care and Education Reconciliation Act of 2010 (Federal Health Care Legislation) were enacted. One of the most significant provisions of the Federal Health Care Legislation for Alliant Energy, IPL and WPL requires a reduction in their tax deductions for retiree health care costs beginning in 2013, to the extent their drug expenses are reimbursed under the Medicare Part D retiree drug subsidy program. The reduction in the future deductibility of retiree health care costs accrued as of Dec. 31, 2009 required Alliant Energy, IPL and WPL to record deferred income tax expense of $7 million, $4 million and $3 million, respectively, in 2010.

State filing changes - In 2009, the Wisconsin Senate Bill 62 (SB 62) was enacted. The most significant provision of SB 62 for Alliant Energy, IPL and WPL required combined reporting for corporate income taxation in Wisconsin beginning with tax returns filed for the calendar year 2009. This provision requires all legal entities in which Alliant Energy owns a 50% or more interest to file as members of a unitary return in Wisconsin. As a result of this provision in SB 62 and in order to take advantage of efficiencies that may be available as a result of IPL and WPL sharing resources and facilities, WPL filed as a member of Iowa consolidated tax returns beginning with calendar year 2009. Changes in state apportioned income tax rates resulting from Wisconsin combined reporting requirements and WPL's plans to be included in Iowa consolidated tax returns required Alliant Energy, IPL and WPL to adjust the carrying value of their deferred income tax assets and liabilities in 2009. The provisions of SB 62 initially made it unlikely that Alliant Energy would be able to utilize the majority of its current Wisconsin net operating loss carryforwards before they expire resulting in additional valuation allowances in 2009. Alliant Energy, IPL and WPL recognized net income tax benefits in 2009 of $40 million, $33 million and $2 million, respectively, from the changes in state apportioned income tax rates and additional valuation allowances. Refer to "Wisconsin tax legislation" above for changes to Alliant Energy's assumptions regarding the utilization of state net operating loss carryforwards and related reversal of valuation allowances in 2011 as a result of a Wisconsin tax law change.

Deferred Tax Assets and Liabilities - Consistent with rate making treatment, deferred taxes are offset in the tables below for temporary differences that have related regulatory assets and regulatory liabilities. The deferred income tax (assets) and liabilities included on Alliant Energy's Consolidated Balance Sheets at Dec. 31 arise from the following temporary differences (in millions):

	2011								2010
	Deferred Tax Assets			Deferred Tax Liabilities		Net			Deferred Tax Assets			Deferred Tax Liabilities		Net
Property	$	—		$	1,926.4	$	1,926.4		$	—		$	1,419.8	$	1,419.8
Investment in ATC		—			93.8		93.8			—			83.9		83.9
Pension and other postretirement benefits obligations		—			91.9		91.9			—			51.1		51.1
Deferred portion of tax gain on IPL's electric transmission assets sale		—			75.5		75.5			—			100.3		100.3
Regulatory liability - DAEC sale		(2.5	)		—		(2.5	)		(13.7	)		—		(13.7	)
Customer advances		(13.7	)		—		(13.7	)		(15.0	)		—		(15.0	)
Regulatory liability - IPL's electric transmission assets sale		(15.6	)		—		(15.6	)		(27.2	)		—		(27.2	)
Net operating losses carryforward - state		(39.9	)		—		(39.9	)		(19.2	)		—		(19.2	)
Regulatory liability - mixed service costs deduction		(66.7	)		—		(66.7	)		—			—		—
Regulatory liability - repairs expenditures		(71.8	)		—		(71.8	)		(60.9	)		—		(60.9	)
Federal credit carryforward		(107.4	)		—		(107.4	)		(79.8	)		—		(79.8	)
Net operating losses carryforward - federal		(336.1	)		—		(336.1	)		(93.7	)		—		(93.7	)
Other		(98.5	)		132.8		34.3			(98.1	)		146.8		48.7
Subtotal		(752.2	)		2,320.4		1,568.2			(407.6	)		1,801.9		1,394.3
Valuation allowances (a)		1.2			—		1.2			18.5			—		18.5
		($751.0	)	$	2,320.4	$	1,569.4			($389.1	)	$	1,801.9	$	1,412.8
						2011								2010
Other current assets							($22.8	)							($21.5	)
Deferred income taxes							1,592.2								1,434.3
Total deferred tax liabilities						$	1,569.4							$	1,412.8

(a) Refer to "Wisconsin tax legislation" above for discussion of the reversal of valuation allowances related to state net operating loss carryforwards in 2011 as a result of a Wisconsin tax law change.

The deferred income tax (assets) and liabilities included on IPL's Consolidated Balance Sheets at Dec. 31 arise from the following temporary differences (in millions):

	2011								2010
	Deferred Tax Assets			Deferred Tax Liabilities		Net			Deferred Tax Assets			Deferred Tax Liabilities		Net
Property	$	—		$	1,134.1	$	1,134.1		$	—		$	850.5	$	850.5
Deferred portion of tax gain on electric transmission assets sale		—			75.5		75.5			—			100.3		100.3
Pension and other postretirement benefits obligations		—			67.6		67.6			—			43.9		43.9
Regulatory liability - flood insurance		(2.1	)		—		(2.1	)		(16.8	)		—		(16.8	)
Regulatory liability - DAEC sale		(2.5	)		—		(2.5	)		(13.7	)		—		(13.7	)
Net operating losses carryforward - state (a)		(12.5	)		—		(12.5	)		(0.2	)		—		(0.2	)
Regulatory liability - electric transmission assets sale		(15.6	)		—		(15.6	)		(27.2	)		—		(27.2	)
Federal credit carryforward (a)		(25.0	)		—		(25.0	)		(12.4	)		—		(12.4	)
Regulatory liability - mixed service costs deduction		(66.7	)		—		(66.7	)		—			—		—
Regulatory liability - repairs expenditures		(71.8	)		—		(71.8	)		(60.9	)		—		(60.9	)
Net operating losses carryforward - federal (b)		(154.4	)		—		(154.4	)		(41.3	)		—		(41.3	)
Other		(45.9	)		42.7		(3.2	)		(40.9	)		54.5		13.6
		($396.5	)	$	1,319.9	$	923.4			($213.4	)	$	1,049.2	$	835.8
						2011								2010
Other current assets							($13.5	)							($13.2	)
Deferred income taxes							936.9								849.0
Total deferred tax liabilities						$	923.4							$	835.8

(a) Earliest expiration date is 2022.

(b) Earliest expiration date is 2030.

The deferred income tax (assets) and liabilities included on WPL's Consolidated Balance Sheets at Dec. 31 arise from the following temporary differences (in millions):

	2011								2010
	Deferred Tax Assets			Deferred Tax Liabilities		Net			Deferred Tax Assets			Deferred Tax Liabilities		Net
Property	$	—		$	697.1	$	697.1		$	—		$	494.8	$	494.8
Investment in ATC		—			93.8		93.8			—			83.9		83.9
Pension and other postretirement benefits obligations		—			49.6		49.6			—			32.1		32.1
Net operating losses carryforward - state (a)		(5.1	)		—		(5.1	)		—			—		—
Investment tax credits		(6.6	)		—		(6.6	)		(7.4	)		—		(7.4	)
Customer advances		(11.6	)		—		(11.6	)		(13.1	)		—		(13.1	)
Federal credit carryforward (a)		(26.1	)		—		(26.1	)		(11.5	)		—		(11.5	)
Net operating losses carryforward - federal (b)		(141.1	)		—		(141.1	)		(38.2	)		—		(38.2	)
Other		(17.6	)		34.1		16.5			(12.0	)		37.2		25.2
		($208.1	)	$	874.6	$	666.5			($82.2	)	$	648.0	$	565.8
						2011								2010
Other current assets							($6.0	)							($4.6	)
Deferred income taxes							672.5								570.4
Total deferred tax liabilities						$	666.5							$	565.8

(a) Earliest expiration date is 2022.

(b) Earliest expiration date is 2030.

Property - The increase in property-related deferred tax liabilities for Alliant Energy, IPL and WPL in the tables above were primarily due to temporary differences from bonus depreciation deductions available in 2011 and a change in the tax accounting method for mixed service cost deductions in 2011.

Bonus depreciation deductions - In 2010, the Small Business Jobs Act of 2010 (SBJA) and the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 (the Act) were enacted. The most significant provisions of the SBJA and the Act for Alliant Energy, IPL and WPL are related to the extension of bonus depreciation deductions for certain expenditures for property that are placed in service through Dec. 31, 2012. Based on capital projects placed into service in 2011, Alliant Energy currently estimates its total bonus depreciation deductions to be claimed in its 2011 federal income tax return will be approximately $572 million ($194 million for IPL and $334 million for WPL).

Mixed service costs deductions - In 2010, Alliant Energy filed a request with the IRS for a change in its tax accounting method for mixed service costs. In March 2011, Alliant Energy received consent from the IRS to reflect this change as part of its 2010 federal income tax return. The change allows Alliant Energy to currently deduct a portion of its mixed service costs, which have historically been capitalized for tax purposes. This change was applied retroactively to mixed service costs incurred since 1989. Alliant Energy recently completed an assessment of its eligible mixed service costs for the period from 1989 through 2010 and included $247 million ($141 million for IPL and $106 million for WPL) of mixed service costs deductions for these years in its 2010 federal income tax return.

Pension and other postretirement benefits obligations - The increase in pension and other postretirement benefits obligations for Alliant Energy, IPL and WPL in the tables above were primarily due to the employer contributions of $126 million, $61 million and $52 million, respectively, made to company-sponsored defined benefit pension and other postretirement benefits plans in 2011. These contributions are deductible on Alliant Energy's, IPL's and WPL's 2011 federal income tax returns.

Deferred portion of tax gain on IPL's electric transmission asset sale - Alliant Energy and IPL recognized a $527 million taxable gain upon the sale of IPL's electric transmission assets in 2007. Under the provisions of the 2005 Energy Tax Act, Alliant Energy and IPL deferred its income tax obligation associated with the taxable gain over an eight-year period, with one-eighth of the income tax obligation being paid in each of the years of 2007 through 2014.

Carryforwards - Alliant Energy's tax carryforwards and associated deferred tax assets and expiration dates at Dec. 31, 2011 were estimated as follows (in millions):

	Carryforward Amount			Deferred Tax Assets (a)			Earliest Expiration Date
Federal net operating losses	$	1,034		$	355			2030
Federal net operating losses offset - uncertain tax positions		(55	)		(19	)
Federal credits - alternative minimum tax		42			42			None
Federal credits - general business credits		67			65			2022
State net operating losses (b)		786			42			2014
State net operating losses offset - uncertain tax positions		(26	)		(2	)

(a) The amounts for IPL and WPL are included in the deferred tax (assets) and liabilities tables above.

(b) At Dec. 31, 2011, the state net operating losses carryforwards had expiration dates ranging from 2014 to 2031 with 99% expiring after 2020. Due to the uncertainty of the realization of state net operating losses tax carryforwards, Alliant Energy had valuation allowances of $1.2 million and $18.5 million as of Dec. 31, 2011 and 2010, respectively. Refer to "Wisconsin tax legislation" above for discussion of the reversal of valuation allowances related to state net operating loss carryforwards in 2011 as a result of a Wisconsin tax law change.

Uncertain Tax Positions - A reconciliation of the beginning and ending amounts of uncertain tax positions, excluding interest, is as follows (in millions):

	Alliant Energy									IPL									WPL
	2011			2010			2009			2011			2010			2009			2011			2010			2009
Balance, Jan. 1	$	66.7		$	101.7		$	14.0		$	33.0		$	58.4		$	9.4		$	33.7		$	42.1		$	2.5
Additions based on tax positions related to the current year		0.7			3.8			6.6			0.1			2.5			3.2			0.6			1.3			2.5
Reductions based on tax positions related to the current year		—			—			—			—			—			—			—			—			—
Additions for tax positions of prior years (a)		—			9.1			88.7			—			3.8			51.2			—			5.2			37.3
Reductions for tax positions of prior years (b)		(43.9	)		(31.8	)		(4.5	)		(22.2	)		(22.7	)		(4.1	)		(21.7	)		(8.0	)		(0.2	)
Settlements with taxing authorities		—			(16.1	)		(1.2	)		—			(9.0	)		—			—			(6.9	)		—
Lapse of statute of limitations		—			—			(1.9	)		—			—			(1.3	)		—			—			—
Balance, Dec. 31 (c)	$	23.5		$	66.7		$	101.7		$	10.9		$	33.0		$	58.4		$	12.6		$	33.7		$	42.1

(a) The additions for tax positions of prior years were related to positions taken by Alliant Energy, IPL and WPL on their federal and state tax returns related to the capitalization and dispositions of property.

(b) The reductions of tax positions of prior years during 2011 were related to guidance published by the IRS clarifying the treatment of repair expenditures for electric distribution property. The reductions of tax positions of prior years during 2010 were primarily related to deductions taken by Alliant Energy, IPL and WPL on their federal and state tax returns that were settled under audit for amounts less than the recorded amounts.

(c) At Dec. 31, 2011 and 2010, $10 million and $31 million, respectively, of uncertain tax positions balances for both Alliant Energy and IPL included amounts recorded in regulatory liability accounts.

	Alliant Energy						IPL						WPL
	Dec. 31,						Dec. 31,						Dec. 31,
	2011		2010		2009		2011		2010		2009		2011		2010		2009
Tax positions favorably impacting future effective tax rates for continuing operations	$	—	$	—	$	13.6	$	—	$	—	$	10.9	$	—	$	—	$	1.4
Interest accrued		0.4		0.7		5.0		0.4		0.7		2.8		—		—		2.1
Penalties accrued		—		—		—		—		—		—		—		—		—

Open tax years - Tax years that remain subject to examination by major jurisdictions are as follows:

	Open Years
Major Jurisdiction	Alliant Energy	IPL	WPL
Consolidated federal income tax returns (a)	2005-2010	2005-2010	2005-2010
Consolidated Iowa income tax returns (b)	2005-2010	2005-2010	2005-2010
Wisconsin income tax returns	2005-2008	N/A	2005-2008
Wisconsin combined tax returns	2009-2010	2009-2010	2009-2010

(a) 2005 through 2009 are effectively settled excluding deductions included in Alliant Energy's 2008 and 2009 federal income tax returns for repair expenditures. The statute of limitations for 2005 through 2008 has been extended to Dec. 31, 2012.

(b) 2005 through 2007 are open for federal audit adjustments only.

Reasonably possible changes to uncertain tax positions in 2012 - In 2012, statutes of limitations will expire for Alliant Energy's, IPL's and WPL's tax returns in multiple state jurisdictions. The expiration of the statutes of limitations is not anticipated to have any impact on Alliant Energy's, IPL's and WPL's uncertain tax positions in 2012. In 2010, the IRS completed the audits of Alliant Energy's U.S. federal income tax return for calendar years 2005 through 2008. In 2011, the IRS completed the audit of Alliant Energy's U.S. federal income tax return for calendar year 2009. The IRS audit of Alliant Energy's federal income tax return for calendar year 2010 is expected to be completed in 2012. Alliant Energy has agreed to all of the IRS' proposed adjustments for deductions and credits included in the 2005 through 2010 income tax returns with the exception of the deductions for the repair expenditures change in method of tax accounting included in Alliant Energy's 2008 through 2010 income tax returns. The IRS denied the full amount of the $503 million ($212 million for IPL and $291 million for WPL) of deductions for the repair expenditures included in Alliant Energy's 2008 through 2010 income tax returns given the absence of current IRS guidelines regarding this deduction. Alliant Energy is appealing the IRS' denial of these deductions. Uncertain tax positions for Alliant Energy, IPL and WPL may decrease within the next 12 months as a result of the expected issuance in 2012 of revenue procedures clarifying the treatment of repair expenditures for electric generation and gas distribution property. An estimate of the expected changes for 2012 cannot be determined at this time.

Regulatory Assets and Regulatory Liabilities - As a rate-regulated enterprise, deferred tax assets and liabilities in the normal course of business that are related to certain property at IPL are required to be passed on to customers through future rates (over a period exceeding 30 years for some generating plant differences) consistent with rate making practices in Iowa. In 2009, IPL recognized significant tax benefits as a result of a change in tax accounting method for repairs expenditures and the tax method for allocating flood insurance proceeds that were recorded as regulatory liabilities. In 2011, IPL recognized significant tax benefits as a result of a tax accounting method change for mixed service costs. IPL expects to refund tax benefits realized from expensing mixed service costs to its Iowa retail customers in the future through the tax benefit rider approved by the IUB. The tax benefits from the tax accounting method change for mixed service costs were recorded as increases to current and non-current regulatory liabilities of $32 million and $134 million, respectively, on Alliant Energy's and IPL's Consolidated Balance Sheets in 2011. Alliant Energy and IPL also recorded an increase to their non-current regulatory assets of $166 million in 2011 to reflect the benefit IPL expects to receive from its Iowa retail customers in the future as the temporary differences associated with the mixed service costs reverse into current tax expense.

Other Income Tax Matters - Alliant Energy files a consolidated federal income tax return, which includes the aggregate taxable income or loss of Alliant Energy and its subsidiaries. In addition, a combined return including Alliant Energy and all of its subsidiaries is filed in Wisconsin. Alliant Energy subsidiaries with a presence in Iowa file as part of a consolidated return in Iowa. Under the terms of a tax sharing agreement between Alliant Energy and its subsidiaries, the subsidiaries calculate state income tax using consolidated apportionment rates applied to separate company taxable income. In 2011, 2010 and 2009, Alliant Energy's, IPL's and WPL's foreign sources of income were not material.

WPL [Member]

Income Taxes

(5) INCOME TAXES

Income Tax Expense (Benefit) - The components of "Income tax expense (benefit)" in the Consolidated Statements of Income were as follows (in millions):

	Alliant Energy									IPL									WPL
	2011			2010			2009			2011			2010			2009			2011			2010			2009
Current tax expense (benefit):
Federal	$	53.3		$	3.4		($	141.2	)	$	54.5			($22.4	)		($59.5	)		($4.3	)	$	26.8		($	137.7	)
State		14.0			9.8			(4.4	)		20.0			(7.6	)		5.9			(7.1	)		14.7			(14.3	)
IPL's tax benefit rider		(35.9	)		—			—			(35.9	)		—			—			—			—			—
Deferred tax expense (benefit):
Federal		92.6			167.7			135.8			(11.6	)		100.9			110.3			111.3			63.3			153.6
State		(17.5	)		4.8			(38.9	)		(16.4	)		(2.8	)		(35.6	)		19.0			6.6			9.3
Production tax credits		(27.1	)		(11.2	)		(4.7	)		(12.3	)		(7.7	)		(0.8	)		(14.8	)		(3.5	)		(3.9	)
Investment tax credits		(1.8	)		(1.8	)		(1.9	)		(0.6	)		(0.6	)		(0.6	)		(1.2	)		(1.2	)		(1.3	)
Provision recorded as a change in uncertain tax positions:
Current		16.3			(84.0	)		47.1			16.6			(41.1	)		7.0			(0.3	)		(41.7	)		39.7
Deferred		(38.3	)		59.6			—			(17.6	)		26.2			—			(20.7	)		33.3			—
Provision recorded as a change in accrued interest		(0.5	)		(3.1	)		(1.1	)		(0.3	)		(2.6	)		0.3			—			—			0.4
	$	55.1		$	145.2			($9.3	)		($3.6	)	$	42.3		$	27.0		$	81.9		$	98.3		$	45.8

Income Tax Rates - The overall income tax rates shown in the following table were computed by dividing income tax expense (benefit) by income from continuing operations before income taxes.

	Alliant Energy									IPL									WPL
	2011			2010			2009			2011			2010			2009			2011			2010			2009
Statutory federal income tax rate		35.0	%		35.0	%		35.0	%		35.0	%		35.0	%		35.0	%		35.0	%		35.0	%		35.0	%
State income taxes, net of federal benefits		4.3			4.7			7.8			4.3			4.1			5.6			5.0			5.1			4.5
Adjustment of prior period taxes		0.5			0.2			(6.2	)		1.7			(1.8	)		(5.4	)		—			2.0			0.7
IPL's tax benefit rider		(9.6	)		—			—			(26.5	)		—			—			—			—			—
Production tax credits		(7.2	)		(2.5	)		(3.9	)		(9.1	)		(4.1	)		(0.5	)		(6.0	)		(1.4	)		(2.9	)
Wisconsin Tax Legislation		(5.0	)		—			—			—			—			—			—			—			—
Effect of rate making on property related differences:
Federal		(0.1	)		(1.1	)		(2.4	)		0.5			(1.3	)		(1.0	)		(0.4	)		(1.0	)		(0.8	)
State		(2.1	)		(3.2	)		(2.4	)		(5.8	)		(7.6	)		(1.6	)		(0.1	)		(0.1	)		(0.1	)
Federal Health Care Legislation		—			1.6			—			—			2.0			—			—			1.2			—
State filing changes		—			—			(33.8	)		—			—			(18.2	)		—			—			(1.8	)
Other items, net		(1.1	)		(2.7	)		(1.9	)		(2.8	)		(3.5	)		1.1			(0.1	)		(1.6	)		(0.7	)
Overall income tax rate		14.7	%		32.0	%		(7.8	%)		(2.7	%)		22.8	%		15.0	%		33.4	%		39.2	%		33.9	%

Adjustment of prior period taxes - In 2010, the IRS completed the audits of Alliant Energy's U.S. federal income tax returns for calendar years 2005 through 2008. The net impact of the completion of these audits and reversal of reserves for uncertain tax positions related to those audits resulted in Alliant Energy and IPL recognizing net income tax benefits in 2010 of $7 million and $5 million, respectively. These income tax benefits decreased Alliant Energy's and IPL's effective tax rate by 1.4% and 2.7%, respectively, and are included, along with other adjustments, in "Adjustment of prior period taxes" in the 2010 column of the above table. The net impact of the completion of the 2005 through 2008 audits and reversal of reserves for uncertain tax positions related to these audits did not have a material impact on WPL's income tax rates for 2010.

IPL's tax benefit rider - In January 2011, the IUB approved a tax benefit rider proposed by IPL, which utilizes tax-related regulatory liabilities to credit bills of Iowa retail electric customers beginning in February 2011 to help offset the impact of the recent rate increases on such customers. These regulatory liabilities are related to tax benefits from tax accounting method changes for repairs, mixed service costs and allocation of insurance proceeds from the floods in 2008. Alliant Energy's and IPL's effective tax rates in 2011 include the impact of reducing income tax expense with offsetting reductions to regulatory liabilities as a result of implementing the tax benefit rider. Refer to Note 1(b) for additional details of IPL's tax benefit rider.

Production tax credits - Alliant Energy, IPL and WPL earn production tax credits from the wind projects they own and operate. Production tax credits are based on the electricity generated by each wind project during the first 10 years of operations. Alliant Energy has three wind projects that are currently generating production tax credits: WPL's 68 MW Cedar Ridge wind project, which began generating electricity in late 2008; IPL's 200 MW Whispering Willow - East wind project, which began generating electricity in late 2009; and WPL's 200 MW Bent Tree - Phase I wind project, which began generating electricity in late 2010. Production tax credits (net of state tax impacts) resulting from these wind projects were as follows (in millions):

	Alliant Energy							IPL						WPL
	2011		2010			2009		2011		2010		2009		2011		2010			2009
Whispering Willow - East (IPL)	$	12.3	$	7.7		$	0.8	$	12.3	$	7.7	$	0.8	$	—	$	—		$	—
Bent Tree - Phase I (WPL) (a)		9.3		1.2			—		—		—		—		9.3		1.2			—
Cedar Ridge (WPL)		4.5		3.3			3.9		—		—		—		4.5		3.3			3.9
		26.1		12.2			4.7		12.3		7.7		0.8		13.8		4.5			3.9
Deferral (a)		1.0		(1.0	)		—		—		—		—		1.0		(1.0	)		—
	$	27.1	$	11.2		$	4.7	$	12.3	$	7.7	$	0.8	$	14.8	$	3.5		$	3.9

(a) In accordance with its December 2009 order, the PSCW authorized WPL to defer the retail portion of the production tax credits generated from its Bent Tree - Phase I wind project in 2010. As a result of a regulatory assessment completed in 2011, the retail portion of the production tax credit deferral was reversed.

Wisconsin tax legislation - In June 2011, the 2011 Wisconsin Act 32 (Act 32) was enacted. The most significant provision of Act 32 for Alliant Energy authorizes combined groups to share net operating loss carryforwards that were incurred by group members prior to Jan. 1, 2009 and utilize these shared net operating losses over 20 years beginning after Dec. 31, 2011. Based on this provision of Act 32, Alliant Energy now anticipates its Wisconsin combined group will be able to fully utilize $368 million of Wisconsin net operating losses incurred by Alliant Energy and Resources prior to Jan. 1, 2009 to offset future taxable income and therefore reversed previously recorded deferred tax asset valuation allowances related to state net operating loss carryforwards of $19 million in 2011.

Effect of rate making on property related differences - Alliant Energy's and IPL's state income taxes are impacted by certain property related differences at IPL for which deferred tax is not recorded in the income statement pursuant to Iowa rate making principles. The primary factor contributing to this impact on state taxes was tax depreciation related to IPL's Whispering Willow - East wind project, which was placed into service in late 2009 and resulted in a decrease in state taxes for Alliant Energy and IPL of approximately $6 million, $12 million and $2 million in 2011, 2010 and 2009, respectively.

Federal health care legislation - In 2010, the Patient Protection and Affordable Care Act, and Health Care and Education Reconciliation Act of 2010 (Federal Health Care Legislation) were enacted. One of the most significant provisions of the Federal Health Care Legislation for Alliant Energy, IPL and WPL requires a reduction in their tax deductions for retiree health care costs beginning in 2013, to the extent their drug expenses are reimbursed under the Medicare Part D retiree drug subsidy program. The reduction in the future deductibility of retiree health care costs accrued as of Dec. 31, 2009 required Alliant Energy, IPL and WPL to record deferred income tax expense of $7 million, $4 million and $3 million, respectively, in 2010.

State filing changes - In 2009, the Wisconsin Senate Bill 62 (SB 62) was enacted. The most significant provision of SB 62 for Alliant Energy, IPL and WPL required combined reporting for corporate income taxation in Wisconsin beginning with tax returns filed for the calendar year 2009. This provision requires all legal entities in which Alliant Energy owns a 50% or more interest to file as members of a unitary return in Wisconsin. As a result of this provision in SB 62 and in order to take advantage of efficiencies that may be available as a result of IPL and WPL sharing resources and facilities, WPL filed as a member of Iowa consolidated tax returns beginning with calendar year 2009. Changes in state apportioned income tax rates resulting from Wisconsin combined reporting requirements and WPL's plans to be included in Iowa consolidated tax returns required Alliant Energy, IPL and WPL to adjust the carrying value of their deferred income tax assets and liabilities in 2009. The provisions of SB 62 initially made it unlikely that Alliant Energy would be able to utilize the majority of its current Wisconsin net operating loss carryforwards before they expire resulting in additional valuation allowances in 2009. Alliant Energy, IPL and WPL recognized net income tax benefits in 2009 of $40 million, $33 million and $2 million, respectively, from the changes in state apportioned income tax rates and additional valuation allowances. Refer to "Wisconsin tax legislation" above for changes to Alliant Energy's assumptions regarding the utilization of state net operating loss carryforwards and related reversal of valuation allowances in 2011 as a result of a Wisconsin tax law change.

Deferred Tax Assets and Liabilities - Consistent with rate making treatment, deferred taxes are offset in the tables below for temporary differences that have related regulatory assets and regulatory liabilities. The deferred income tax (assets) and liabilities included on Alliant Energy's Consolidated Balance Sheets at Dec. 31 arise from the following temporary differences (in millions):

	2011								2010
	Deferred Tax Assets			Deferred Tax Liabilities		Net			Deferred Tax Assets			Deferred Tax Liabilities		Net
Property	$	—		$	1,926.4	$	1,926.4		$	—		$	1,419.8	$	1,419.8
Investment in ATC		—			93.8		93.8			—			83.9		83.9
Pension and other postretirement benefits obligations		—			91.9		91.9			—			51.1		51.1
Deferred portion of tax gain on IPL's electric transmission assets sale		—			75.5		75.5			—			100.3		100.3
Regulatory liability - DAEC sale		(2.5	)		—		(2.5	)		(13.7	)		—		(13.7	)
Customer advances		(13.7	)		—		(13.7	)		(15.0	)		—		(15.0	)
Regulatory liability - IPL's electric transmission assets sale		(15.6	)		—		(15.6	)		(27.2	)		—		(27.2	)
Net operating losses carryforward - state		(39.9	)		—		(39.9	)		(19.2	)		—		(19.2	)
Regulatory liability - mixed service costs deduction		(66.7	)		—		(66.7	)		—			—		—
Regulatory liability - repairs expenditures		(71.8	)		—		(71.8	)		(60.9	)		—		(60.9	)
Federal credit carryforward		(107.4	)		—		(107.4	)		(79.8	)		—		(79.8	)
Net operating losses carryforward - federal		(336.1	)		—		(336.1	)		(93.7	)		—		(93.7	)
Other		(98.5	)		132.8		34.3			(98.1	)		146.8		48.7
Subtotal		(752.2	)		2,320.4		1,568.2			(407.6	)		1,801.9		1,394.3
Valuation allowances (a)		1.2			—		1.2			18.5			—		18.5
		($751.0	)	$	2,320.4	$	1,569.4			($389.1	)	$	1,801.9	$	1,412.8
						2011								2010
Other current assets							($22.8	)							($21.5	)
Deferred income taxes							1,592.2								1,434.3
Total deferred tax liabilities						$	1,569.4							$	1,412.8

(a) Refer to "Wisconsin tax legislation" above for discussion of the reversal of valuation allowances related to state net operating loss carryforwards in 2011 as a result of a Wisconsin tax law change.

The deferred income tax (assets) and liabilities included on IPL's Consolidated Balance Sheets at Dec. 31 arise from the following temporary differences (in millions):

	2011								2010
	Deferred Tax Assets			Deferred Tax Liabilities		Net			Deferred Tax Assets			Deferred Tax Liabilities		Net
Property	$	—		$	1,134.1	$	1,134.1		$	—		$	850.5	$	850.5
Deferred portion of tax gain on electric transmission assets sale		—			75.5		75.5			—			100.3		100.3
Pension and other postretirement benefits obligations		—			67.6		67.6			—			43.9		43.9
Regulatory liability - flood insurance		(2.1	)		—		(2.1	)		(16.8	)		—		(16.8	)
Regulatory liability - DAEC sale		(2.5	)		—		(2.5	)		(13.7	)		—		(13.7	)
Net operating losses carryforward - state (a)		(12.5	)		—		(12.5	)		(0.2	)		—		(0.2	)
Regulatory liability - electric transmission assets sale		(15.6	)		—		(15.6	)		(27.2	)		—		(27.2	)
Federal credit carryforward (a)		(25.0	)		—		(25.0	)		(12.4	)		—		(12.4	)
Regulatory liability - mixed service costs deduction		(66.7	)		—		(66.7	)		—			—		—
Regulatory liability - repairs expenditures		(71.8	)		—		(71.8	)		(60.9	)		—		(60.9	)
Net operating losses carryforward - federal (b)		(154.4	)		—		(154.4	)		(41.3	)		—		(41.3	)
Other		(45.9	)		42.7		(3.2	)		(40.9	)		54.5		13.6
		($396.5	)	$	1,319.9	$	923.4			($213.4	)	$	1,049.2	$	835.8
						2011								2010
Other current assets							($13.5	)							($13.2	)
Deferred income taxes							936.9								849.0
Total deferred tax liabilities						$	923.4							$	835.8

(a) Earliest expiration date is 2022.

(b) Earliest expiration date is 2030.

The deferred income tax (assets) and liabilities included on WPL's Consolidated Balance Sheets at Dec. 31 arise from the following temporary differences (in millions):

	2011								2010
	Deferred Tax Assets			Deferred Tax Liabilities		Net			Deferred Tax Assets			Deferred Tax Liabilities		Net
Property	$	—		$	697.1	$	697.1		$	—		$	494.8	$	494.8
Investment in ATC		—			93.8		93.8			—			83.9		83.9
Pension and other postretirement benefits obligations		—			49.6		49.6			—			32.1		32.1
Net operating losses carryforward - state (a)		(5.1	)		—		(5.1	)		—			—		—
Investment tax credits		(6.6	)		—		(6.6	)		(7.4	)		—		(7.4	)
Customer advances		(11.6	)		—		(11.6	)		(13.1	)		—		(13.1	)
Federal credit carryforward (a)		(26.1	)		—		(26.1	)		(11.5	)		—		(11.5	)
Net operating losses carryforward - federal (b)		(141.1	)		—		(141.1	)		(38.2	)		—		(38.2	)
Other		(17.6	)		34.1		16.5			(12.0	)		37.2		25.2
		($208.1	)	$	874.6	$	666.5			($82.2	)	$	648.0	$	565.8
						2011								2010
Other current assets							($6.0	)							($4.6	)
Deferred income taxes							672.5								570.4
Total deferred tax liabilities						$	666.5							$	565.8

(a) Earliest expiration date is 2022.

(b) Earliest expiration date is 2030.

Property - The increase in property-related deferred tax liabilities for Alliant Energy, IPL and WPL in the tables above were primarily due to temporary differences from bonus depreciation deductions available in 2011 and a change in the tax accounting method for mixed service cost deductions in 2011.

Bonus depreciation deductions - In 2010, the Small Business Jobs Act of 2010 (SBJA) and the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 (the Act) were enacted. The most significant provisions of the SBJA and the Act for Alliant Energy, IPL and WPL are related to the extension of bonus depreciation deductions for certain expenditures for property that are placed in service through Dec. 31, 2012. Based on capital projects placed into service in 2011, Alliant Energy currently estimates its total bonus depreciation deductions to be claimed in its 2011 federal income tax return will be approximately $572 million ($194 million for IPL and $334 million for WPL).

Mixed service costs deductions - In 2010, Alliant Energy filed a request with the IRS for a change in its tax accounting method for mixed service costs. In March 2011, Alliant Energy received consent from the IRS to reflect this change as part of its 2010 federal income tax return. The change allows Alliant Energy to currently deduct a portion of its mixed service costs, which have historically been capitalized for tax purposes. This change was applied retroactively to mixed service costs incurred since 1989. Alliant Energy recently completed an assessment of its eligible mixed service costs for the period from 1989 through 2010 and included $247 million ($141 million for IPL and $106 million for WPL) of mixed service costs deductions for these years in its 2010 federal income tax return.

Pension and other postretirement benefits obligations - The increase in pension and other postretirement benefits obligations for Alliant Energy, IPL and WPL in the tables above were primarily due to the employer contributions of $126 million, $61 million and $52 million, respectively, made to company-sponsored defined benefit pension and other postretirement benefits plans in 2011. These contributions are deductible on Alliant Energy's, IPL's and WPL's 2011 federal income tax returns.

Deferred portion of tax gain on IPL's electric transmission asset sale - Alliant Energy and IPL recognized a $527 million taxable gain upon the sale of IPL's electric transmission assets in 2007. Under the provisions of the 2005 Energy Tax Act, Alliant Energy and IPL deferred its income tax obligation associated with the taxable gain over an eight-year period, with one-eighth of the income tax obligation being paid in each of the years of 2007 through 2014.

Carryforwards - Alliant Energy's tax carryforwards and associated deferred tax assets and expiration dates at Dec. 31, 2011 were estimated as follows (in millions):

	Carryforward Amount			Deferred Tax Assets (a)			Earliest Expiration Date
Federal net operating losses	$	1,034		$	355			2030
Federal net operating losses offset - uncertain tax positions		(55	)		(19	)
Federal credits - alternative minimum tax		42			42			None
Federal credits - general business credits		67			65			2022
State net operating losses (b)		786			42			2014
State net operating losses offset - uncertain tax positions		(26	)		(2	)

(a) The amounts for IPL and WPL are included in the deferred tax (assets) and liabilities tables above.

(b) At Dec. 31, 2011, the state net operating losses carryforwards had expiration dates ranging from 2014 to 2031 with 99% expiring after 2020. Due to the uncertainty of the realization of state net operating losses tax carryforwards, Alliant Energy had valuation allowances of $1.2 million and $18.5 million as of Dec. 31, 2011 and 2010, respectively. Refer to "Wisconsin tax legislation" above for discussion of the reversal of valuation allowances related to state net operating loss carryforwards in 2011 as a result of a Wisconsin tax law change.

Uncertain Tax Positions - A reconciliation of the beginning and ending amounts of uncertain tax positions, excluding interest, is as follows (in millions):

	Alliant Energy									IPL									WPL
	2011			2010			2009			2011			2010			2009			2011			2010			2009
Balance, Jan. 1	$	66.7		$	101.7		$	14.0		$	33.0		$	58.4		$	9.4		$	33.7		$	42.1		$	2.5
Additions based on tax positions related to the current year		0.7			3.8			6.6			0.1			2.5			3.2			0.6			1.3			2.5
Reductions based on tax positions related to the current year		—			—			—			—			—			—			—			—			—
Additions for tax positions of prior years (a)		—			9.1			88.7			—			3.8			51.2			—			5.2			37.3
Reductions for tax positions of prior years (b)		(43.9	)		(31.8	)		(4.5	)		(22.2	)		(22.7	)		(4.1	)		(21.7	)		(8.0	)		(0.2	)
Settlements with taxing authorities		—			(16.1	)		(1.2	)		—			(9.0	)		—			—			(6.9	)		—
Lapse of statute of limitations		—			—			(1.9	)		—			—			(1.3	)		—			—			—
Balance, Dec. 31 (c)	$	23.5		$	66.7		$	101.7		$	10.9		$	33.0		$	58.4		$	12.6		$	33.7		$	42.1

(a) The additions for tax positions of prior years were related to positions taken by Alliant Energy, IPL and WPL on their federal and state tax returns related to the capitalization and dispositions of property.

(b) The reductions of tax positions of prior years during 2011 were related to guidance published by the IRS clarifying the treatment of repair expenditures for electric distribution property. The reductions of tax positions of prior years during 2010 were primarily related to deductions taken by Alliant Energy, IPL and WPL on their federal and state tax returns that were settled under audit for amounts less than the recorded amounts.

(c) At Dec. 31, 2011 and 2010, $10 million and $31 million, respectively, of uncertain tax positions balances for both Alliant Energy and IPL included amounts recorded in regulatory liability accounts.

	Alliant Energy						IPL						WPL
	Dec. 31,						Dec. 31,						Dec. 31,
	2011		2010		2009		2011		2010		2009		2011		2010		2009
Tax positions favorably impacting future effective tax rates for continuing operations	$	—	$	—	$	13.6	$	—	$	—	$	10.9	$	—	$	—	$	1.4
Interest accrued		0.4		0.7		5.0		0.4		0.7		2.8		—		—		2.1
Penalties accrued		—		—		—		—		—		—		—		—		—

Open tax years - Tax years that remain subject to examination by major jurisdictions are as follows:

	Open Years
Major Jurisdiction	Alliant Energy	IPL	WPL
Consolidated federal income tax returns (a)	2005-2010	2005-2010	2005-2010
Consolidated Iowa income tax returns (b)	2005-2010	2005-2010	2005-2010
Wisconsin income tax returns	2005-2008	N/A	2005-2008
Wisconsin combined tax returns	2009-2010	2009-2010	2009-2010

(a) 2005 through 2009 are effectively settled excluding deductions included in Alliant Energy's 2008 and 2009 federal income tax returns for repair expenditures. The statute of limitations for 2005 through 2008 has been extended to Dec. 31, 2012.

(b) 2005 through 2007 are open for federal audit adjustments only.

Reasonably possible changes to uncertain tax positions in 2012 - In 2012, statutes of limitations will expire for Alliant Energy's, IPL's and WPL's tax returns in multiple state jurisdictions. The expiration of the statutes of limitations is not anticipated to have any impact on Alliant Energy's, IPL's and WPL's uncertain tax positions in 2012. In 2010, the IRS completed the audits of Alliant Energy's U.S. federal income tax return for calendar years 2005 through 2008. In 2011, the IRS completed the audit of Alliant Energy's U.S. federal income tax return for calendar year 2009. The IRS audit of Alliant Energy's federal income tax return for calendar year 2010 is expected to be completed in 2012. Alliant Energy has agreed to all of the IRS' proposed adjustments for deductions and credits included in the 2005 through 2010 income tax returns with the exception of the deductions for the repair expenditures change in method of tax accounting included in Alliant Energy's 2008 through 2010 income tax returns. The IRS denied the full amount of the $503 million ($212 million for IPL and $291 million for WPL) of deductions for the repair expenditures included in Alliant Energy's 2008 through 2010 income tax returns given the absence of current IRS guidelines regarding this deduction. Alliant Energy is appealing the IRS' denial of these deductions. Uncertain tax positions for Alliant Energy, IPL and WPL may decrease within the next 12 months as a result of the expected issuance in 2012 of revenue procedures clarifying the treatment of repair expenditures for electric generation and gas distribution property. An estimate of the expected changes for 2012 cannot be determined at this time.

Regulatory Assets and Regulatory Liabilities - As a rate-regulated enterprise, deferred tax assets and liabilities in the normal course of business that are related to certain property at IPL are required to be passed on to customers through future rates (over a period exceeding 30 years for some generating plant differences) consistent with rate making practices in Iowa. In 2009, IPL recognized significant tax benefits as a result of a change in tax accounting method for repairs expenditures and the tax method for allocating flood insurance proceeds that were recorded as regulatory liabilities. In 2011, IPL recognized significant tax benefits as a result of a tax accounting method change for mixed service costs. IPL expects to refund tax benefits realized from expensing mixed service costs to its Iowa retail customers in the future through the tax benefit rider approved by the IUB. The tax benefits from the tax accounting method change for mixed service costs were recorded as increases to current and non-current regulatory liabilities of $32 million and $134 million, respectively, on Alliant Energy's and IPL's Consolidated Balance Sheets in 2011. Alliant Energy and IPL also recorded an increase to their non-current regulatory assets of $166 million in 2011 to reflect the benefit IPL expects to receive from its Iowa retail customers in the future as the temporary differences associated with the mixed service costs reverse into current tax expense.

Other Income Tax Matters - Alliant Energy files a consolidated federal income tax return, which includes the aggregate taxable income or loss of Alliant Energy and its subsidiaries. In addition, a combined return including Alliant Energy and all of its subsidiaries is filed in Wisconsin. Alliant Energy subsidiaries with a presence in Iowa file as part of a consolidated return in Iowa. Under the terms of a tax sharing agreement between Alliant Energy and its subsidiaries, the subsidiaries calculate state income tax using consolidated apportionment rates applied to separate company taxable income. In 2011, 2010 and 2009, Alliant Energy's, IPL's and WPL's foreign sources of income were not material.