MoneyGram 2010 Annual Report Download - page 133

Table of Contents
MONEYGRAM INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Net deferred tax asset positions are reflected in the "Other assets" line in the Consolidated Balance Sheets, while net deferred tax liability
positions are included in the "Accounts payable and other liabilities" line in the Consolidated Balance Sheets. Essentially all of the
deferred tax assets relate to the U.S. jurisdiction. The Company has determined that a valuation allowance is required for a significant
portion of the deferred tax assets as there is not sufficient positive evidence to overcome the significant negative evidence of a three year
cumulative loss. Changes in facts and circumstances in the future may cause the Company to record additional tax benefits as further
deferred tax valuation allowances are released and carry-forwards are utilized. The Company continues to evaluate additional available
tax positions related to the net securities losses in prior years.
The amount and expiration dates of tax loss carry-forwards (not tax effected) and credit carry-forwards as of December 31, 2010 are as
follows:
Expiration
(Amounts in thousands) Date Amount
United States federal and state loss carry-forwards 2012 - 2030 $ 892,974
United States federal tax credit carry-forwards 2015 - 2028 31,357
United States federal tax credit carry-forwards Indefinite 16,245
The Company, or one of its subsidiaries, files income tax returns in the United States federal jurisdiction and various states and foreign
jurisdictions. With a few exceptions, the Company is no longer subject to foreign or United States federal, state and local income tax
examinations for years prior to 2005. The Company is subject to foreign, United States federal and certain state income tax examinations
for 2005 through 2009, with a United States federal income tax examination for 2005 through 2007 currently in administrative appeals.
Unrecognized tax benefits are recorded in "Accounts payable and other liabilities" in the Consolidated Balance Sheets. Following is a
reconciliation of unrecognized tax benefits for the year ended December 31:
(Amounts in thousands) 2010 2009 2008
Beginning balance $ 10,711 $ 13,089 $ 33,669
Additions based on tax positions related to the current year — 832 5,711
Settlements (296) (1,029) —
Lapse in statute of limitations (211) (2,181) (479)
Reductions for tax positions of prior years — — (19,204)
Foreign currency translation — — (6,608)
Ending balance $ 10,204 $ 10,711 $ 13,089
As of December 31, 2010, the liability for unrecognized tax benefits was $10.2 million, of which $3.7 million could impact the effective
tax rate if recognized. The Company accrues interest and penalties for unrecognized tax benefits through "Income tax expense (benefit)"
in the Consolidated Statements of Income (Loss). For the years ended December 31, 2010, 2009 and 2008, the Company accrued
approximately $0.3 million, $0.6 million and $2.8 million, respectively, in interest and penalties in its Consolidated Statements of Income
(Loss), respectively. As of December 31, 2010 and 2009, the Company had a liability of $1.7 million each year for interest and penalties
related to its unrecognized tax benefits. As of December 31, 2010, it is not possible to reasonably estimate the expected change to the
total amount of unrecognized tax positions over the next 12 months.
The Company does not consider its earnings in its foreign entities to be permanently reinvested. As of December 31, 2010 and 2009, a
deferred tax liability of $4.8 million and $6.2 million, respectively, was recognized for the unremitted earnings of its foreign entities.
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