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INCOME TAXES
6 Months Ended
Jun. 30, 2012
INCOME TAXES

NOTE 10 – INCOME TAXES

International Paper made income tax payments, net of refunds, as follows:

 

     Six Months Ended
June  30,
 

In millions

   2012     2011  

Income tax payments (refunds)

   $ (20   $ 11   

The following table presents a rollforward of unrecognized tax benefits and related accrued estimated interest and penalties for the six months ended June 30, 2012:

 

In millions

   Unrecognized
Tax Benefits
    Accrued Estimated
Interest and Tax
Penalties
 

Balance at December 31, 2011

   $ (857   $ (88

Activity for three months ended March 31, 2012

     (119 )(a)      (10

Activity for three months ended June 30, 2012

     (5     0   
  

 

 

   

 

 

 

Balance at June 30, 2012

   $ (981   $ (98
  

 

 

   

 

 

 

 

(a) This activity primarily relates to the unrecognized tax benefits and related accrued interest and penalties assumed as part of the acquisition of Temple-Inland.

The Company currently estimates that, as a result of ongoing discussions, pending tax settlements and expirations of statutes of limitations, the amount of unrecognized tax benefits could be reduced by approximately $75 million during the next 12 months and approximately $40 million of this reduction will positively impact the effective rate.

 

Included in the Company’s income tax provisions for the six months ended June 30, 2012 and 2011, are $(79) million and $(37) million, respectively, related to special items. The components of the net provision related to special items were as follows:

 

     Six Months Ended
June  30,
 

In millions

   2012     2011  

Special items and other charges:

    

Restructuring and other charges

   $ (82   $ (27

Tax-related adjustments:

    

Temple-Inland acquisition

     3        0   

State tax adjustments

     0        5   

Expired tax contingency reserves

     0        (15
  

 

 

   

 

 

 

Income tax provision (benefit) related to special items and discontinued operations

   $ (79   $ (37