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INCOME TAXES | 6 Months Ended
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Dec. 31, 2019
Income Tax Disclosure [Abstract] |
INCOME TAXES | NOTE 10 — INCOME TAXES Tax Cuts and Jobs Act On December 22, 2017, the Tax Cuts and Jobs Act ("TCJA”) was enacted into law, which significantly changed existing U.S. tax law and included numerous provisions that affect our business. We recorded a provisional net charge related to the enactment of the TCJA in fiscal year 2018 and adjusted the provisional net charge by recording additional tax expense of $157 million in the second quarter of fiscal year 2019 pursuant to SEC Staff Accounting Bulletin No. 118. Effective Tax Rate Our effective tax rate was 17% and 19% for the three months ended December 31, 2019 and 2018, respectively, and 17% and 16% for the six months ended December 31, 2019 and 2018, respectively. The decrease in our effective tax rate for the three months ended December 31, 2019 compared to the prior year was primarily due to the adjustment of the provisional net charge related to the TCJA in the second quarter of fiscal year 2019. The increase in our effective tax rate for the six months ended December 31, 2019 compared to the prior year was primarily due to changes in the mix of our income before income taxes between the U.S. and foreign countries, offset in part by the adjustment of the provisional net charge related to the TCJA. Our effective tax rate was lower than the U.S. federal statutory rate for the three and six months ended December 31, 2019, primarily due to earnings taxed at lower rates in foreign jurisdictions resulting from producing and distributing our products and services through our foreign regional operations centers in Ireland and Puerto Rico, and tax benefits relating to stock-based compensation. Uncertain Tax Positions As of December 31, 2019 and June 30, 2019, unrecognized tax benefits and other income tax liabilities were $16.0 billion and $15.3 billion, respectively, and are included in long-term income taxes in our consolidated balance sheets. We settled a portion of the Internal Revenue Service (“IRS”) audit for tax years 2004 to 2006 in fiscal year 2011. In February 2012, the IRS withdrew its 2011 Revenue Agents Report related to unresolved issues for tax years 2004 to 2006 and reopened the audit phase of the examination. We also settled a portion of the IRS audit for tax years 2007 to 2009 in fiscal year 2016, and a portion of the IRS audit for tax years 2010 to 2013 in fiscal year 2018. We remain under audit for tax years 2004 to 2013. We expect the IRS to begin an examination of tax years 2014 to 2017 within the next 12 months. As of December 31, 2019, the primary unresolved issues for the IRS audits relate to transfer pricing, which could have a material impact in our consolidated financial statements when the matters are resolved. We believe our allowances for income tax contingencies are adequate. We have not received a proposed assessment for the unresolved issues and do not expect a final resolution of these issues in the next 12 months. Based on the information currently available, we do not anticipate a significant increase or decrease to our tax contingencies for these issues within the next 12 months. We are subject to income tax in many jurisdictions outside the U.S. Our operations in certain jurisdictions remain subject to examination for tax years 1996 to 2019, some of which are currently under audit by local tax authorities. The resolution of each of these audits is not expected to be material to our consolidated financial statements.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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