v3.25.2
Income Taxes
 6 Months Ended
Jun. 30, 2025
Income Tax Disclosure [Abstract]  
Income Taxes INCOME TAXES
Unrecognized Tax Benefits
($ in millions)June 30, 2025December 31, 2024
Unrecognized tax benefits, excluding related interest expense and penalties(a)
$225  $207 
Portion that, if recognized, would reduce tax expense and effective tax rate(b)
$178 $163 
____________________
(a)Interest and penalties related to unrecognized tax benefits were not material for all periods presented.
(b)Comprised of federal unrecognized tax benefits and state and local unrecognized tax benefits net of the effects of associated U.S. federal income taxes. Excludes amounts attributable to any related valuation allowances resulting from associated increases in deferred tax assets.
We establish a liability that represents the difference between a tax position taken (or expected to be taken) on an income tax return and the amount of taxes recognized in our financial statements. The liability associated with the unrecognized tax benefits is adjusted periodically when new information becomes available. The amount of unrecognized tax benefits that is reasonably possible to be resolved in the next twelve months is expected to be $33 million, of which $26 million, if recognized, would reduce the Company's tax expense and effective tax rate.
In the current year, the Company executed a Memorandum of Understanding with the IRS to participate voluntarily in the IRS Compliance Assurance Process (“CAP”) program for the 2025 tax year, and thus the tax year is under IRS review. The IRS is also examining our 2024 tax year, and we expect the review will be completed in the current year. Additionally, we are under examination in various states going back to 2014.
We believe that there are no issues or claims that are likely to significantly impact our results of operations, financial position or cash flows. We further believe that we have made adequate provision for all income tax uncertainties that could result from such examinations.