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Income Taxes
6 Months Ended
Jun. 30, 2021
Income Tax Disclosure [Abstract]  
INCOME TAXES
6. INCOME TAXES

Income tax provisions for interim (quarterly) periods are based on an estimated annual effective income tax rate calculated separately from the effect of significant, infrequent or unusual items. Income tax expense was $31 million for the three months ended June 30, 2021 compared to income tax benefit of $34 million for the three months ended June 30, 2020. The change was primarily driven by discrete tax expenses and benefits. In the three months ended June 30, 2021, the Company recognized a $34 million expense from recording a valuation allowance against interest limitation carryforwards in the U.S. and a $14 million benefit from the deferred tax impact of a tax law change enacted in the U.K. In the three months ended June 30, 2020, the Company recognized a $48 million tax benefit for the release of a valuation allowance against U.S. foreign tax credits and the re-establishment of expected foreign tax credit offsets to unrecognized tax benefits.

Income tax expense was $48 million for the six months ended June 30, 2021 compared to income tax benefit of $33 million for the six months ended June 30, 2020. The change was primarily driven by higher income before taxes and discrete tax expenses and benefits. In the six months ended June 30, 2021, the Company recognized a $34 million expense from recording a valuation allowance against interest limitation carryforwards in the U.S. and a $14 million benefit from the deferred tax impact of a tax law change in the U.K. In the six months ended June 30, 2020, the Company recognized a $48 million tax benefit for the release of a valuation allowance against U.S. foreign tax credits and the re-establishment of expected foreign tax credit offsets to unrecognized tax benefits and tax benefits of $2 million related to an error in the calculation of the permanent differences on stock compensation and $3 million for the write-off of tax payables incorrectly recorded in prior periods.

The Company engages in continuous discussions and negotiations with taxing authorities regarding tax matters, and the Company has determined that over the next 12 months it expects to resolve certain tax matters related to U.S. and foreign
jurisdictions. As a result, as of June 30, 2021, we estimate that it is reasonably possible that gross unrecognized tax benefits may decrease by $6 million to $24 million in the next 12 months.