CenturyLink 2015 Annual Report Download - page 189

A reconciliation of the change in our gross unrecognized tax benefits (excluding both interest and any
related federal benefit) from January 1 to December 31 for 2015 and 2014 is as follows:
2015 2014
(Dollars in millions)
Unrecognized tax benefits at beginning of year .................. $17 14
Increase in tax positions taken in the current year ................ 1 —
Increase in tax positions taken in the prior year .................. 7 9
Decrease due to the reversal of tax positions taken in a prior year .... (9) (2)
Decrease from the lapse of statute of limitations ................. (1) (1)
Settlements ............................................... — (3)
Unrecognized tax benefits at end of year ....................... $15 17
The total amount of unrecognized tax benefits that, if recognized, would impact the effective income tax
rate was $32 million at both December 31, 2015 and 2014.
Our policy is to reflect interest expense associated with unrecognized tax benefits in income tax expense.
We had accrued interest (presented before related tax benefits) of approximately $33 million and $30 million at
December 31, 2015 and 2014, respectively.
We file income tax returns, including returns for our subsidiaries, with federal, state and local jurisdictions.
Our uncertain income tax positions are related to tax years that are currently under or remain subject to
examination by the relevant taxing authorities.
In 2013, Qwest filed an amended 2009 federal income tax return primarily to report the carryforward impact
of prior year settlements. The refund for the 2009 amended return filed in 2013 was received in 2014. In 2014,
Qwest filed an amended federal income tax return for 2010. The refund claim filed for 2010 was accepted by the
IRS, and the refund was received in 2015. The 2010 amended return released certain general business credits that
were required to be carried back to 2009. As a result, a subsequent 2009 federal amended return was filed by
Qwest in 2014 to reflect the carrybacks from 2010. The 2009 refund claim filed in 2014 was accepted by the IRS
and the refund was received in 2015.
Beginning with the 2012 tax year, our federal consolidated returns are subject to annual examination by the
IRS.
Our open income tax years by major jurisdiction are as follows at December 31, 2015:
Jurisdiction Open Tax Years
Federal ........................ 2012—current
State
Arizona .................... 2010—current
Florida .................... 2010—current
Other states ................. 2011—current
Since the period for assessing additional liability typically begins upon the filing of a return, it is possible
that certain jurisdictions could assess tax for years prior to the open tax years disclosed above. Additionally, it is
possible that certain jurisdictions in which we do not believe we have an income tax filing responsibility, and
accordingly did not file a return, may attempt to assess a liability, or that other jurisdictions to which we pay
taxes may attempt to assert that we owe additional taxes.
Based on our current assessment of various factors, including (i) the potential outcomes of these ongoing
examinations, (ii) the expiration of statute of limitations for specific jurisdictions, (iii) the negotiated settlement
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