Income Taxes (Tables)

12 Months Ended

Dec. 31, 2021

Schedule of Income Before Income Tax, Domestic and Foreign [Table Text Block]

The components of International Paper’s earnings from continuing operations before income taxes and equity earnings by taxing jurisdiction were as follows:


In millions	2021		2020		2019
Earnings (loss)
U.S.	$	906	$	660	$	1,103
Non-U.S.	93		(331)		(182)
Earnings (loss) from continuing operations before income taxes and equity earnings (losses)	$	999	$	329	$	921

Schedule of Components of Income Tax Expense (Benefit) [Table Text Block]

The provision (benefit) for income taxes from continuing operations (excluding noncontrolling interests) by taxing jurisdiction was as follows:


In millions	2021		2020		2019
Current tax provision (benefit)
U.S. federal	$	413	$	98	$	219
U.S. state and local	47		31		18
Non-U.S.	37		(3)		18
	$	497	$	126	$	255
Deferred tax provision (benefit)
U.S. federal	$	(274)	$	(2)	$	47
U.S. state and local	(27)		2		(21)
Non-U.S.	(8)		50		196
	$	(309)	$	50	$	222
Income tax provision (benefit)	$	188	$	176	$	477

Schedule of Effective Income Tax Rate Reconciliation [Table Text Block]

A reconciliation of income tax expense using the statutory U.S. income tax rate compared with the actual income tax provision follows:


In millions	2021			2020			2019
Earnings (loss) from continuing operations before income taxes and equity earnings	$	999		$	329		$	921
Statutory U.S. income tax rate	21		%	21		%	21		%
Tax expense (benefit) using statutory U.S. income tax rate	210			69			193
State and local income taxes	15			26			(1)
Impact of rate differential on non-U.S. permanent differences and earnings	5			29			25
Foreign valuation allowance	—			—			203
Adjustment to tax basis of assets	(14)			—			—
Non-deductible business expenses	1			4			6
Non-deductible impairments	—			92			31
Non-deductible compensation	11			11			2
Tax audits	9			(28)			—
Deemed repatriation, net of foreign tax credits	—			—			1
U.S. federal tax rate change	—			7			—
Foreign derived intangible income deduction	(7)			—			4
US tax on non-U.S. earnings (GILTI and Subpart F)	5			6			29
Foreign tax credits	(6)			(3)			2
General business and other tax credits	(39)			(42)			(31)
Tax expense (benefit) on equity earnings	—			8			10
Other, net	(2)			(3)			3
Income tax provision (benefit)	$	188		$	176		$	477
Effective income tax rate	19		%	53		%	52		%

Schedule of Deferred Tax Assets and Liabilities [Table Text Block]

The tax effects of significant temporary differences, representing deferred income tax assets and liabilities at December 31, 2021 and 2020, were as follows:


In millions	2021		2020
Deferred income tax assets:
Postretirement benefit accruals	$	84	$	91
Pension obligations	—		280
Tax credits	199		293
Net operating and capital loss carryforwards	661		563
Compensation reserves	184		170
Lease obligations	92		99
Environmental reserves	104		111
Other	189		191
Gross deferred income tax assets	$	1,513	$	1,798
Less: valuation allowance (a)	(708)		(681)
Net deferred income tax asset	$	805	$	1,117
Deferred income tax liabilities:
Intangibles	$	(140)	$	(114)
Investments	(56)		(251)
Right of use assets	(92)		(99)
Pension obligations	(34)		—
Plants, properties and equipment	(1,776)		(1,826)
Forestlands, related installment sales, and investment in subsidiary	(1,279)		(1,351)
Gross deferred income tax liabilities	$	(3,377)	$	(3,641)
Net deferred income tax liability	$	(2,572)	$	(2,524)

(a) The net change in the total valuation allowance for the years ended December 31, 2021 and 2020 was a increase of $27 million and an decrease of $(6) million, respectively.

Schedule of Unrecognized Tax Benefits Rollforward [Table Text Block]

A reconciliation of the beginning and ending amount of unrecognized tax benefits for the years ended December 31, 2021, 2020 and 2019 is as follows:


In millions	2021		2020		2019
Balance at January 1	$	(143)	$	(166)	$	(172)
(Additions) reductions for tax positions related to current year	(13)		(10)		(5)
(Additions) for tax positions related to prior years	(23)		(10)		(3)
Reductions for tax positions related to prior years	1		30		5
Settlements	10		13		7
Expiration of statutes of limitations	1		1		2
Currency translation adjustment	1		(1)		—
Balance at December 31	$	(166)	$	(143)	$	(166)

Summary of Operating Loss and Tax Credit Carryforwards [Table Text Block]

The following details the scheduled expiration dates of the Company’s net operating loss and income tax credit carryforwards:


In millions	2022 Through 2031		2032 Through 2041		Indefinite		Total
U.S. federal and non-U.S. NOLs	$	53	$	123	$	425	$	601
State taxing jurisdiction NOLs (a)	52		8		—		60
U.S. federal, non- U.S. and state tax credit carryforwards (a)	81		5		113		199
Total	$	186	$	136	$	538	$	860
Less: valuation allowance (a)	(100)		(118)		(389)		(607)
Total, net	$	86	$	18	$	149	$	253

(a) State amounts are presented net of federal benefit.