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Income Taxes

3 Months Ended

Mar. 31, 2020

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The Company’s income tax provision and effective income tax rate were as follows:

	Three Months Ended March 31,
(In millions)	2020				2019
Income tax provision	$	79			$	31
Effective income tax rate	17.1		%		11.9		%

The income tax provision as a percentage of income before income taxes and loss from investments in unconsolidated affiliates was 17.1% and 11.9% for the three months ended March 31, 2020 and 2019, respectively. The effective rate in the first quarter

of 2020 includes $113 million of income tax expense associated with the $431 million gain on the sale of a 60% interest of the Company’s Investment Services business (see Note 4). The effective rate in the first quarter of 2019 included discrete tax benefits due to a loss from subsidiary restructuring.

The Company’s potential liability for unrecognized tax benefits before interest and penalties was approximately $146 million at March 31, 2020. The Company believes it is reasonably possible that the liability for unrecognized tax benefits may decrease by up to $37 million over the next twelve months as a result of possible closure of federal tax audits, potential settlements with certain states and foreign countries, and the lapse of the statutes of limitations in various state and foreign jurisdictions.

As of March 31, 2020, the Company’s U.S. federal income tax returns for 2016 through 2019, and tax returns in certain states and foreign jurisdictions for 2005 through 2019, remain subject to examination by taxing authorities. In connection with the acquisition of First Data, the Company is subject to income tax examination from 2010 through 2015, 2018 and forward in relation to First Data’s U.S. federal income tax return. State and local examinations are substantially complete through 2010 in relation to First Data’s state and local tax filings. Foreign jurisdictions generally remain subject to examination by their respective authorities from 2006 forward, none of which are considered significant jurisdictions.

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- References

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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

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