American Home Shield 2007 Annual Report Download - page 65

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In the ordinary course, the Company is subject to review by domestic and foreign taxing authorities, including the IRS. In January
2005, the Company reached a comprehensive agreement with the IRS regarding its examination of the Company's federal income
taxes through the year 2002. As previously disclosed, the Company had not been audited by the IRS during the period in which it
operated as a master limited partnership (1987 through 1997) or in subsequent years. Consequently, the examination covered
numerous significant matters, including the tax consequences resulting from the Company's reincorporation in 1997, and the sale of
its large Management Services segment in November 2001. Pursuant to the agreement, the Company paid taxes and interest
(primarily in February 2005) to the IRS and various states in the amount of $131 million ($112 million of increased taxes and $19
million of interest). These payments represented only one part of a four part agreement with the IRS, which also included: tax
savings of $25 million that were realized in 2004; a reduction of $45 million in the estimated tax payments made during the second
half of 2005 and a deferred tax asset totaling $57 million that will be realized through 2016.
As a result of this agreement, certain deferred tax assets, primarily related to intangible assets, which had previously not been
recorded due to uncertainties associated with the
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