INCOME TAXES

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

A summary of the income tax (expense) benefit in the consolidated statements of income (loss) follows:

	Year Ended December 31,
	2021		2020		2019
	(in millions)
Income tax (expense) benefit:
Current (expense) benefit	$	11	$	(112)	$	295
Deferred (expense) benefit	463		739		284
Total	$	474	$	627	$	579

The Federal income taxes attributable to consolidated operations are different from the amounts determined by multiplying the earnings before income taxes and noncontrolling interest by the expected Federal income tax rate of 21% . The sources of the difference and their tax effects are as follows:

	Year Ended December 31,
	2021		2020		2019
	(in millions)
Expected income tax (expense) benefit	$	393	$	291	$	517
Non-taxable investment income	79		91		73
Tax audit interest	(14)		(8)		(14)
Tax settlements/uncertain tax position release	—		231		—
Tax credits	28		21		—
Other	(12)		1		3
Income tax (expense) benefit	$	474	$	627	$	579

During the fourth quarter of 2020, the Company agreed to the Internal Revenue Service’s Revenue Agent’s Report for its consolidated 2010 through 2013 Federal corporate income tax returns. The impact on the Company’s financial statements and unrecognized tax benefits was a tax benefit of $231 million.

The components of the net deferred income taxes are as follows:

	December 31,
	2021				2020
	Assets		Liabilities		Assets		Liabilities
	(in millions)
Compensation and related benefits	$	46	$	—	$	58	$	—
Net operating loss and credits	732		—		—		—
Reserves and reinsurance	2,072		—		1,483		—
DAC	—		685		—		606
Unrealized investment gains (losses)	—		892		—		1,668
Investments	—		18		1,071		—
Other	31		—		—		111
Total	$	2,881	$	1,595	$	2,612	$	2,385

The Company has Federal net operating loss carryforwards of $3.4 billion for the years ending December 31, 2021, which do not expire.

A reconciliation of unrecognized tax benefits (excluding interest and penalties) follows:

	Year Ended December 31,
	2021		2020		2019
	(in millions)
Balance at January 1,	$	281	$	297	$	273
Additions for tax positions of prior years	17		229		24
Reductions for tax positions of prior years	(3)		(250)		—
Additions for tax positions of current year	—		—		—
Settlements with tax authorities	—		5		—
Balance at December 31,	$	295	$	281	$	297
Unrecognized tax benefits that, if recognized, would impact the effective rate	$	43	$	47	$	222

The Company recognizes accrued interest and penalties related to unrecognized tax benefits in tax expense. Interest and penalties included in the amounts of unrecognized tax benefits as of December 31, 2021 and 2020 were $47 million and $34 million, respectively. For 2021, 2020 and 2019, respectively, there were $14 million, $(21) million and $14 million in interest expense (benefit) related to unrecognized tax benefits.

It is reasonably possible that the total amount of unrecognized tax benefits will change within the next 12 months due to the conclusion of IRS proceedings and the addition of new issues for open tax years. The possible change in the amount of unrecognized tax benefits cannot be estimated at this time.

As of December 31, 2021, tax years 2014 and subsequent remain subject to examination by the IRS.