INCOME TAXES INCOME TAXES

9 Months Ended

Sep. 30, 2013

Income Taxes Disclosure [Abstract]

Income Tax Disclosure [Text Block]

INCOME TAXES

During the first quarter of 2013, court rulings on two separate tax matters resulted in the adjustment of uncertain tax positions. In February 2013, the U.S. District Court for the Middle District of Louisiana issued a ruling that disallowed, for tax purposes, transactions and partnerships associated with Chemtech, a wholly owned subsidiary. In March 2013, the U.S. Supreme Court denied certiorari in Union Carbide's research tax credit case. Through the denial of certiorari, the decision issued by the U.S. Court of Appeals denying Union Carbide's tax credit claim for supplies used in process-related research and development at its manufacturing facilities became final. As a result of these rulings, the Company adjusted uncertain tax positions related to these matters, resulting in a tax charge of $223 million in the first quarter of 2013.

The following table provides a reconciliation of the Company's unrecognized tax benefits for the periods ended September 30, 2013 and December 31, 2012:

Total Gross Unrecognized Tax Benefits	Sep 30, 2013			Dec 31, 2012
In millions
Balance at January 1	$	409		$	339
Increases related to positions taken on items from prior years	318			66
Decreases related to positions taken on items from prior years	(77		)	(32		)
Increases related to positions taken in the current year	11			53
Settlement of uncertain tax positions with authorities	(353		)	(9		)
Decreases due to expiration of statutes of limitations	(7		)	(8		)
Balance at end of period	$	301		$	409

At September 30, 2013, the total amount of unrecognized tax benefits was $301 million ($409 million at December 31, 2012), of which $293 million would impact the effective tax rate, if recognized ($392 million at December 31, 2012).

Interest and penalties associated with uncertain tax positions, including the matters that resulted in the adjustment of uncertain tax positions, are recognized as components of "Provision for income taxes" in the consolidated statements of income and totaled a benefit of $16 million for the three months ended September 30, 2013 ($2 million benefit for the three months ended September 30, 2012). During the nine months ended September 30, 2013, the Company recognized a benefit of $167 million for interest and penalties associated with uncertain tax positions (a charge of $85 million for the nine months ended September 30, 2012). The Company's accrual for interest and penalties was $42 million at September 30, 2013 ($131 million at December 31, 2012).