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Income Taxes
3 Months Ended
Mar. 31, 2014
Income Tax Disclosure [Abstract]  
Income Taxes
Income Taxes

Over the last three years, what is referred to as the “look-through rule” exception has been allowed to expire and has been retroactively reinstated, which has impacted TransUnion’s effective tax rate. The Internal Revenue Code requires U.S. corporate shareholders to recognize current U.S. taxable income from passive income, such as dividends earned, at certain foreign subsidiaries regardless of whether that income is remitted to the U.S. The look-through rule provides an exception to this recognition for subsidiary passive income attributable to an active business. When the look-through rule is not in effect, we are required under ASC 740-30 to accrue a tax liability for certain foreign earnings as if those earnings were distributed.

For the three months ended March 31, 2014, we reported a loss before income taxes and an effective tax rate benefit of 0.7%. The effective tax rate was lower than the 35% U.S. federal statutory rate due primarily to the expiration of the look-through rule effective January 1, 2014, and the application of ASC 740-30 to our unremitted foreign earnings, along with a change in state tax rates.

For the three months ended March 31, 2013, we reported a loss before income taxes and an effective tax rate benefit of 15.3%. The effective tax rate was lower than the 35% U.S. federal statutory rate due primarily to the retroactive reinstatement of the look-through rule effective January 1, 2013, and a change in state tax rates, partially offset by a reduced rate of tax on our foreign earnings.

The total amount of unrecognized tax benefits was $4.6 million as of both March 31, 2014, and December 31, 2013, and these same amounts would affect the effective tax rate, if recognized, as of those respective dates. A majority of the unrecognized tax benefit as of March 31, 2014, was presented in the balance sheet as a reduction to a deferred tax asset for a net operating loss carryforward under ASU 2013-11 that was adopted effective January 1, 2014. The accrued interest payable for taxes as of both March 31, 2014, and December 31, 2013, was $0.7 million. There was no significant liability for tax penalties as of March 31, 2014, or December 31, 2013. We are regularly audited by federal, state and foreign taxing authorities and, given the uncertainties inherent in the audit process, it is reasonably possible that certain audits could result in a significant increase or decrease in the total amounts of unrecognized tax benefits.