XML 68 R16.htm IDEA: XBRL DOCUMENT
v3.20.4

Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2020
Income Tax Disclosure [Abstract] |
Income Taxes | (10) Income Taxes Tax Allocation Agreement In August 2018, CVR Energy completed an exchange offer whereby public unitholders tendered a total of 21,625,106 CVR Refining common units in exchange for a total of 13,699,549 shares of CVR Energy common stock (the “CVRR Unit Exchange”). Prior to the CVRR Unit Exchange, CVR Energy was a member of the consolidated federal tax group of AEP, an affiliate of IEP, and party to a tax allocation agreement with AEP (the “Tax Allocation Agreement”). The Tax Allocation Agreement provided that AEP would pay all consolidated federal income taxes on behalf of the consolidated tax group. As a result, CVR Energy was required to make payments to AEP in an amount equal to the tax liability, if any, that it would have had paid if it were to file as a consolidated group separate and apart from AEP. Following the CVRR Unit Exchange, IEP and affiliates’ ownership of CVR Energy was reduced below 80% and, since that time, CVR Energy is no longer eligible to file as a member of the AEP consolidated federal income tax group. On August 2, 2018, CVR Energy became the parent of a new consolidated group for U.S. federal income tax purposes, filing and paying its federal income tax obligations directly to the IRS. Pursuant to the terms of the Tax Allocation Agreement, however, CVR Energy may be required to make payments in respect of taxes owed by AEP for periods prior to the exchange. Similar principles may apply for state or local income tax purposes where CVR Energy filed combined, consolidated or unitary tax returns with AEP. AEP’s federal income tax return for the periods ended December 31, 2017 and 2018 are currently under examination by the IRS. As of December 31, 2020 and 2019, the Company recognized a nominal payable for state income taxes due to AEP. The payable is recognized in Other current liabilities in the Consolidated Balance Sheets. As of December 31, 2020 and 2019, the Company’s Consolidated Balance Sheets reflected a receivable of $44 million from and a payable of $20 million to, respectively, the IRS and certain state jurisdictions. Income Tax (Benefit) Expense Income tax (benefit) expense is comprised of the following:
| Year Ended December 31,
(in millions) | 2020 |  | 2019 |  | 2018
Current: |  |  |  |  |
Federal | $ | (63) |  |  | $ | 96 |  |  | $ | 31 |
State | (5) |  |  | 5 |  |  | (7) |
Total current | (68) |  |  | 101 |  |  | 24 |
Deferred: |  |  |  |  |
Federal | (1) |  |  | 3 |  |  | 39 |
State | (26) |  |  | 25 |  |  | 16 |
Total deferred | (27) |  |  | 28 |  |  | 55 |
Total income tax (benefit) expense | $ | (95) |  |  | $ | 129 |  |  | $ | 79 |
The following is a reconciliation of total income tax (benefit) expense to income tax (benefit) expense computed by applying the statutory federal income tax rate to pretax (loss) income:
| Year Ended December 31,
(in millions) | 2020 |  | 2019 |  | 2018
Tax computed at federal statutory rate | $ | (87) |  |  | $ | 103 |  |  | $ | 94 |
State income taxes, net of federal tax benefit | (18) |  |  | 29 |  |  | 12 |
State tax incentives, net of federal tax expense | (7) |  |  | (4) |  |  | (4) |
Noncontrolling interest | 13 |  |  | 4 |  |  | (23) |
Goodwill impairment | 3 |  |  | — |  |  | — |
Other, net | 1 |  |  | (3) |  |  | — |
Total income tax (benefit) expense | $ | (95) |  |  | $ | 129 |  |  | $ | 79 |
Deferred Tax Assets and Liabilities The income tax effect of temporary differences that give rise to the Deferred income tax assets and Deferred income tax liabilities at December 31, 2020 and 2019 are as follows:
| December 31,
(in millions) | 2020 |  | 2019
Deferred income tax assets: |  |  |
Personnel accruals | $ | 2 |  |  | $ | — |
State tax credit carryforward, net | 20 |  |  | 7 |
Net operating loss carryforward | 9 |  |  | — |
Total gross deferred income tax assets | 31 |  |  | 7 |
Deferred income tax liabilities: |  |  |
Unrealized gain | (9) |  |  | — |
Investment in CVR Partners | (67) |  |  | (61) |
Investment in CVR Refining | (320) |  |  | (341) |
Other | (3) |  |  | (1) |
Total gross deferred income tax liabilities | (399) |  |  | (403) |
Net deferred income tax liabilities | $ | (368) |  |  | $ | (396) |
Although realization is not assured, management believes that it is more likely than not that all of the deferred income tax assets will be realized, and therefore, no valuation allowance was recognized as of December 31, 2020 and 2019. As of December 31, 2020, CVR Energy has state tax credits of approximately $30 million, which are available to reduce future state income taxes. These credits, if not used, will begin expiring in 2033. Uncertain Tax Positions A reconciliation of unrecognized tax benefits is as follows:
| Year Ended December 31,
(in millions) | 2020 |  | 2019 |  | 2018
Balance, beginning of year | $ | 22 |  |  | $ | 23 |  |  | $ | 29 |
Decrease based on prior year tax position | (2) |  |  | — |  |  | — |
Increase in current year tax positions | — |  |  | 2 |  |  | — |
Reductions related to expirations from statute of limitations | (3) |  |  | (3) |  |  | (6) |
Balance, end of year | $ | 17 |  |  | $ | 22 |  |  | $ | 23 |
Included in the balance of unrecognized tax benefits as of December 31, 2020, 2019, and 2018 are $13 million, $15 million, and $18 million, respectively, of tax benefits that, if recognized, would affect the effective tax rate. Additionally, the Company reasonably believes that no unrecognized tax positions related to state income tax credits will be recognized by the end of 2021 as a result of the expiration of statute of limitations. Approximately $8 million and $10 million of unrecognized tax benefits were netted with Deferred income tax asset carryforwards as of December 31, 2020 and 2019, respectively. The remaining unrecognized tax benefits are included in Other long-term liabilities in the Consolidated Balance Sheets. CVR Energy recognized nominal interest expense and $1 million liability for interest as of December 31, 2020, nominal interest benefit and nominal liability for interest as of December 31, 2019, and interest benefit of approximately $1 million and nominal liability for interest as of December 31, 2018. No penalties were recognized during 2020, 2019, or 2018. At December 31, 2020, the Company’s tax filings are generally open to examination in the United States for the tax years ended December 31, 2017 through December 31, 2019 and in various individual states for the tax years ended December 31, 2016 through December 31, 2019.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI http://asc.fasb.org/extlink&oid=116825942&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI http://asc.fasb.org/extlink&oid=116825942&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration