Huntington National Bank 2012 Annual Report Download - page 167

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17. INCOME TAXES
The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction and various state, city, and foreign
jurisdictions. Federal income tax audits have been completed through 2009. The Company has appealed certain proposed adjustments
resulting from the IRS examination of the 2006 and 2007 tax returns. In addition, we will appeal certain proposed adjustments
resulting from the IRS examination of our 2008 and 2009 tax returns. Management believes the tax positions taken related to such
proposed adjustments were correct and supported by applicable statutes, regulations, and judicial authority, and intend to vigorously
defend them. During 2011, Management entered into discussions with the Appeals Division of the IRS for the 2006 and 2007 tax
returns. It is possible the ultimate resolution of the proposed adjustments, if unfavorable, may be material to the results of operations
in the period it occurs. However, although no assurance can be given, Management believes the resolution of these examinations will
not, individually or in the aggregate, have a material adverse impact on our consolidated financial position. In the 2013 first quarter,
the IRS will begin its examination of our 2010 and 2011 federal income tax returns. Various state and other jurisdictions remain open
to examination for tax years 2006 and forward.
Huntington accounts for uncertainties in income taxes in accordance with ASC 740, Income Taxes. At December 31, 2012,
Huntington had gross unrecognized tax benefits of $6.2 million in income tax liability related to tax positions. Due to the complexities
of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from the current estimate of
the tax liabilities. However, any ultimate settlement is not expected to be material to the Consolidated Financial Statements as a
whole. Huntington does not anticipate the total amount of gross unrecognized tax benefits to significantly change within the next
12 months.
The following table provides a reconciliation of the beginning and ending amounts of gross unrecognized tax benefits:
(dollar amounts in thousands) 2012 2011
Unrecognized tax benefits at beginning of year $ 11,896 $ 49,506
Gross increases for tax positions taken during prior years --- ---
Gross decreases for tax positions taken during prior years (5,650) (37,610)
Unrecognized tax benefits at end of year $ 6,246 $ 11,896
Any interest and penalties on income tax assessments or income tax refunds are recognized in the Consolidated Statements of
Income as a component of provision for income taxes. Huntington recognized $0.1 million of interest benefit for the year ended
December 31, 2012, and $0.1 million, and $2.2 million of interest expense for the years ended December 31, 2011 and 2010,
respectively. Total interest accrued was $2.2 million and $2.3 million for the years ended December 31, 2012 and 2011, respectively.
All of the gross unrecognized tax benefits would impact the Company’s effective tax rate if recognized.
The following is a summary of the provision (benefit) for income taxes:
Year Ended December 31,
(dollar amounts in thousands) 2012 2011 2010
Current tax provision (benefit)
Federal $ 24,006 $ 10,468 $ 40,675
State 6,966 (5,040) 29,539
Total current tax provision (benefit) 30,972 5,428 70,214
Deferred tax provision (benefit)
Federal 186,396 158,709 (30,243)
State (33,273) 484 (7)
Total deferred tax provision (benefit) 153,123 159,193 (30,250)
Provision for income taxes $ 184,095 $ 164,621 $ 39,964
Tax impact associated with securities transactions included in the above amounts were $1.7 million of tax expense in 2012, and
tax benefits of $1.3 million in 2011, and $0.1 million in 2010.