Sallie Mae 2009 Annual Report Download - page 224

19. Income Taxes (Continued)
Reasonably Possible Significant Increases/Decreases within Twelve Months
The IRS issued a Revenue Agent’s Report (“RAR”) during the second quarter of 2007 concluding the
primary exam of the Company’s 2003 and 2004 U.S. federal tax returns. However, the exam of these years
remained open until the third quarter of 2009 when the IRS concluded the examination of an entity in which
the Company is an investor. In addition, during the third quarter of 2007, the Company filed an administra-
tive-level appeal related to one unagreed item originating from the Company’s 2004 U.S. federal tax return. It
is reasonably possible that there will be a decrease in the Company’s unrecognized tax benefits as a result of
the resolution of this item. When considering both tax and interest amounts, the decrease could be
approximately $8 million to $12 million.
The IRS began the examination of the Company’s 2007 and 2008 federal income tax returns during the
second quarter of 2009. It is reasonably possible that issues that arise during the exam may create the need for
an increase in unrecognized tax benefits. Until the exam proceeds further, an estimate of any such amounts
cannot currently be made.
In the event that the Company is not contacted for exam by additional tax authorities by the end of 2010,
it is reasonably possible that there will be a decrease in the Company’s unrecognized tax benefits as a result
of the lapse of various statute of limitations periods. When considering both tax and interest amounts, the
decrease could be approximately $5 million to $9 million.
Tax Years Remaining Subject to Exam
The Company or one of its subsidiaries files income tax returns at the U.S. federal level, in most
U.S. states, and various foreign jurisdictions. U.S. federal income tax returns filed for years prior to 2003 and
for years 2005-2006 have been audited and are now resolved. As shown in the table below, the Company’s
primary operating subsidiary has been audited by the listed states through the year shown, again with all
issues resolved. Other combinations of subsidiaries, tax years, and jurisdictions remain open for review,
subject to statute of limitations periods (typically 3 to 4 prior years).
State Year audited through
Florida ....................................................... 2000
Indiana....................................................... 2000
Pennsylvania . ................................................. 2000
California ..................................................... 2002
Missouri...................................................... 2003
NewYork..................................................... 2004
North Carolina ................................................. 2005
Texas........................................................ 2004
Virginia ...................................................... 2007
20. Segment Reporting
The Company has two primary operating segments — the Lending operating segment and the APG,
formerly known as DMO, operating segment. The Lending and APG operating segments meet the quantitative
thresholds for reportable segments. Accordingly, the results of operations of the Company’s Lending and APG
segments are presented below. The Company has smaller operating segments including the Guarantor
Servicing, Loan Servicing, and Upromise operating segments, as well as certain other products and services
F-97
SLM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts, unless otherwise stated)