Unum 2009 Annual Report Download - page 125

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Unum 2009 Annual Report
We recognize interest expense and penalties, if applicable, related to unrecognized tax benefits in tax expense net of federal income tax.
The total amounts of accrued interest and penalties in our consolidated balance sheets as of December 31, 2009 and 2008 are $19.9 million
and $13.4 million, respectively. We recognized interest related to unrecognized tax expense in our consolidated statements of income of
$6.5 million, $5.9 million, and $2.0 million during 2009, 2008, and 2007, respectively. There were no changes to our uncertain tax positions
as a result of settlements or lapses in statutes of limitations during 2009 or 2008.
We file federal and state income tax returns in the United States and in foreign jurisdictions. We are under continuous examination
by the Internal Revenue Service (IRS) with regard to our U.S. federal income tax returns. The current IRS examination covers our tax years
2005 and 2006. During 2008, the IRS completed its examination of tax years 2002 through 2004 and issued its revenue agent’s report (RAR).
We filed a protest to the RAR in 2008 with respect to all significant adverse proposed adjustments.
During 2009, we had an appeals conference with the IRS with respect to our appeal of IRS audit adjustments for the years 1999 to
2004. Though we have not yet reached a final settlement with the IRS for these years, it is reasonably possible that this appeal will be
resolved in whole or in part within 12 months and that statutes of limitations may expire in multiple jurisdictions within that same period.
As a result, it is reasonably possible that our liability for unrecognized tax benefits could decrease within 12 months by $0 to $40.0 million.
We believe sufficient provision has been made for all uncertain tax positions and that any adjustments by tax authorities with respect to
such positions would not have a material adverse effect on our financial position, liquidity, or results of operations.
Tax years subsequent to 2006 remain subject to examination by tax authorities in the U.S. Tax years subsequent to 2007 remain subject
to examination in major foreign jurisdictions. We believe sufficient provision has been made for all proposed and potential adjustments for
years that are not closed by the statute of limitations in all major tax jurisdictions and that any such adjustments would not have a material
adverse effect on our financial position, liquidity, or results of operations. However, it is possible that the resolution of income tax matters
could produce quarterly volatility in our results of operations in future periods.
Included in 2009 operating results is a refund of interest of $0.3 million before tax and $0.2 million after tax attributable to tax year
1998. Included in 2008 operating results is a refund of interest of $7.6 million before tax and $4.9 million after tax primarily attributable to
tax years 1986 through 1996.
As of December 31, 2009, we had no net operating loss carryforward in the U.S. We held a valuation allowance of $4.2 million related
to basis differences in foreign subsidiaries and net operating loss carryforwards in foreign jurisdictions because, in our judgment, we will
most likely not realize a tax benefit for these amounts. The $0.1 million increase in the valuation allowance during 2009 is due to the
fluctuation in the British pound sterling to dollar exchange rate.
Total income taxes paid during 2009, 2008, and 2007 were $381.6 million, $369.0 million, and $189.9 million, respectively.