Huntington National Bank 2011 Annual Report Download - page 188

17. INCOME TAXES
The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction and various state,
city, and foreign jurisdictions. Federal income tax audits have been completed through 2007. The Company has
appealed certain proposed adjustments resulting from the IRS examination of the 2006 and 2007 tax returns.
Management believes the tax positions taken related to such proposed adjustments were correct and supported by
applicable statutes, regulations, and judicial authority, and intend to vigorously defend them. During 2011,
Management entered into discussions with the Appeals Division of the IRS. It is possible the ultimate resolution
of the proposed adjustments, if unfavorable, may be material to the results of operations in the period it occurs.
However, although no assurance can be given, Management believes the resolution of these examinations will
not, individually or in the aggregate, have a material adverse impact on our consolidated financial position. In the
2011 third quarter, the IRS began its examination of our 2008 and 2009 consolidated federal income tax returns.
Various state and other jurisdictions remain open to examination for tax years 2005 and forward.
Huntington accounts for uncertainties in income taxes in accordance with ASC 740, Income Taxes. At
December 31, 2011, Huntington had gross unrecognized tax benefits of $11.9 million in income tax liability
related to tax positions. Due to the complexities of some of these uncertainties, the ultimate resolution may result
in a payment that is materially different from the current estimate of the tax liabilities. However, any ultimate
settlement is not expected to be material to the Consolidated Financial Statements as a whole. Huntington
recognizes interest and penalties on income tax assessments or income tax refunds in the financial statements as a
component of its provision for income taxes. Huntington does not anticipate the total amount of gross
unrecognized tax benefits to significantly change within the next 12 months.
The following table provides a reconciliation of the beginning and ending amounts of gross unrecognized
tax benefits:
2011 2010 2009
(dollar amounts in thousands)
Unrecognized tax benefits at beginning of year ................ $ 49,506 $17,214 $ —
Gross increases for tax positions taken during current year ..... —— 6,464
Gross increases for tax positions taken during prior years ...... —32,292 10,750
Gross decreases for tax positions taken during prior years ..... (37,610) ——
Unrecognized tax benefits at end of year ..................... $ 11,896 $49,506 $17,214
Any interest and penalties on income tax assessments or income tax refunds are recognized in the
Consolidated Statements of Income as a component of provision for income taxes. Huntington recognized $0.1
million of interest for the year ended December 31, 2011 compared to $2.2 million of interest for the year ended
December 31, 2010. Total interest accrued at December 31, 2011 amounted to $2.3 million. All of the gross
unrecognized tax benefits would impact the Company’s effective tax rate if recognized.
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