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Income Taxes
3 Months Ended
Mar. 31, 2015
Income Tax Disclosure [Abstract]  
Income Taxes

Note 14. Income Taxes

The total amount of unrecognized tax benefits as of March 31, 2015, was $243 million, of which $84 million would affect our effective tax rate if recognized. It is reasonably possible that approximately $9 million of our unrecognized tax benefits as of March 31, 2015 will reverse within the next twelve months.

We recognize interest and penalties related to unrecognized tax benefits through income tax expense. As of March 31, 2015, we had $16 million accrued for the payment of interest and $5 million accrued for the payment of penalties.

During the three months ended March 31, 2014, we resolved a previous dispute related to foreign operating losses, which resulted in a tax benefit of $52 million. The tax benefit included the recognition of a previously unrecognized tax benefit of $21 million, the $2 million reversal of interest accruals, net of tax, and the recognition of a $29 million deferred tax asset relating to net operating losses.

We are subject to taxation in the U.S. federal jurisdiction, as well as various state and foreign jurisdictions. As of March 31, 2015, we are no longer subject to examination by U.S. federal taxing authorities for years prior to 2007 or to examination by any U.S. state taxing authority prior to 2002. All subsequent periods remain eligible for examination. In the significant foreign jurisdictions in which we operate, we are no longer subject to examination by the relevant taxing authorities for any years prior to 2007.

We are currently under audit by the Internal Revenue Service (IRS) for years 2007 through 2009. We have received certain Notices of Proposed Adjustment from the IRS for such years; however, we disagree with the IRS on certain of these adjustments and intend to vigorously contest them, including pursuing all available remedies such as the IRS Appeals process and litigation, if necessary. These unagreed adjustments, if upheld, would result in a significant cash tax and interest payment. More than half of this amount would not affect the effective tax rate due to the timing nature of certain issues. During the three months ended March 31, 2015, the IRS issued a 30-day letter and we responded with a protest letter disputing the unagreed proposed adjustments. We believe we will prevail in the eventual resolution of these matters and have not adjusted our results of operations to the extent we believe it is more likely than not that we will ultimately prevail. As stated, we intend to pursue remedies through the administrative process, including litigation, as discussed above.