AIG 2015 Annual Report Download - page 335

ITEM 8 / NOTE 22. INCOME TAXES
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The following table presents the net deferred tax assets (liabilities) at December 31, 2015 and 2014 on a U.S. GAAP
basis:
December 31,
(in millions) 2015 2014
Net U.S. consolidated return group deferred tax assets $24,134 $ 24,543
Net deferred tax assets (liabilities) in accumulated other comprehensive income (2,806) (5,510)
Valuation allowance (1,281) (129)
Subtotal 20,047 18,904
Net foreign, state and local deferred tax assets 2,078 2,045
Valuation allowance (1,731) (1,610)
Subtotal 347 435
Subtotal - Net U.S, foreign, state and local deferred tax assets 20,394 19,339
Net foreign, state and local deferred tax liabilities (437) (594)
Total AIG net deferred tax assets (liabilities) $19,957 $ 18,745
Deferred Tax Asset Valuation Allowance of U.S. Consolidated Income Tax Group
At December 31, 2015 and 2014, our U.S. consolidated income tax group had net deferred tax assets after valuation
allowance of $20.0 billion and $18.9 billion, respectively. At December 31, 2015 and 2014, our U.S. consolidated income tax
group had valuation allowances of $1.3 billion and $129 million, respectively.
Deferred Tax Liability — Foreign, State and Local
At December 31, 2015 and 2014, we had net deferred tax liabilities of $90 million and $159 million, respectively, related to
foreign subsidiaries, state and local tax jurisdictions, and certain domestic subsidiaries that file separate tax returns.
At December 31, 2015 and 2014, we had deferred tax asset valuation allowances of $1.7 billion and $1.6 billion, respectively,
related to foreign subsidiaries, state and local tax jurisdictions, and certain domestic subsidiaries that file separate tax returns.
We maintained these valuation allowances following our conclusion that we could not demonstrate that it was more likely than
not that the related deferred tax assets will be realized. This was primarily due to factors such as cumulative losses in recent
years and the inability to demonstrate profits within the specific jurisdictions over the relevant carryforward periods.
Tax Examinations and Litigation
We file a consolidated U.S. federal income tax return with our eligible U.S. subsidiaries. Income earned by subsidiaries
operating outside the U.S. is taxed, and income tax expense is recorded, based on applicable U.S. and foreign law.
The statute of limitations for all tax years prior to 2000 has expired for our consolidated federal income tax return. We are
currently under examination for the tax years 2000 through 2010.
On March 20, 2008, we received a Statutory Notice of Deficiency (Notice) from the IRS for years 1997 to 1999. The Notice
asserted that we owe additional taxes and penalties for these years primarily due to the disallowance of foreign tax credits
associated with cross-border financing transactions. The transactions that are the subject of the Notice extend beyond the
period covered by the Notice, and the IRS has administratively challenged the later periods. The IRS has also administratively
challenged other cross-border transactions in later years. We have paid the assessed tax plus interest and penalties for 1997
to 1999. On February 26, 2009, we filed a complaint in the United States District Court for the Southern District of New York
(Southern District) seeking a refund of approximately $306 million in taxes, interest and penalties paid with respect to the 1997
taxable year. We allege that the IRS improperly disallowed foreign tax credits and that our taxable income should be reduced
as a result of the 2005 restatement of our consolidated financial statements.