The Hartford 2014 Annual Report Download - page 213

Table of Contents
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
Included in Other liabilities in the Consolidated Balance Sheets as of December 31, 2014 and 2013 are net deferred tax liabilities related to Japan of $0 and
$61, respectively. The net deferred tax liability of $61 as of December 31, 2013 was comprised of taxes on future taxable income related to owed reinsurance
recoverables, loss reserves and foreign currency translation adjustments.
As of December 31, 2014 the Company had a current income tax receivable of $38, of which $2 was related to Canada and due from a foreign jurisdiction. As
of December 31, 2013 the Company had a current income tax receivable of $72, of which $70 was a payable related to Japan and due to a foreign
jurisdiction.
The Company’s unrecognized tax benefits were unchanged during the years ended December 31, 2014, 2013, and 2012, remaining at $48 as of December 31,
2014, and 2013. This entire amount, if it were recognized, would affect the effective tax rate in the period it is released.
The Company is no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations for years prior to 2007. The federal audit of the years
2007-2011 is expected to conclude in 2015 and it is reasonably possible the Company may be able to reduce part of or the entire amount of the unrecognized
tax benefits within the next 12 months. Apart from the possible reduction in unrecognized tax benefits, management does not expect the conclusion of the
federal audit for the 2007-2011 years will have a material impact on the consolidated financial condition or results of operations. Management believes that
adequate provision has been made in the financial statements for any potential assessments that may result from tax examinations and other tax-related
matters for all open tax years.
The Company classifies interest and penalties (if applicable) as income tax expense in the consolidated financial statements. The Company recognized
interest expense of $0, $5, and $0 for the years ended December 31, 2014, 2013 and 2012, respectively. The Company had approximately $1 of interest
payable for 2014 and 2013. The Company does not believe it would be subject to any penalties in any open tax years and, therefore, has not booked any
accrual for penalties.
A reconciliation of the tax provision (benefit) at the U.S. Federal statutory rate to the provision (benefit) for income taxes is as follows:
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  
Tax provision (benefit) at U.S. Federal statutory rate $ 595 $ 515 $ (31)
Tax-exempt interest (138) (138) (141)
Dividends received deduction (114) (139) (145)
Valuation allowance 5 (2) —
Other 2 10 8
      
F-77