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Income Taxes
6 Months Ended
Jun. 30, 2020
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The effective tax rate was 58.7 percent and 20.6 percent for the three months ended June 30, 2020 and 2019, respectively, and 41.9 percent and 20.7 percent for the six months ended June 30, 2020 and 2019, respectively. The increase for both periods reflects the impact of discrete tax charges primarily related to the realizability of certain foreign deferred tax assets, resulting from cumulative losses in certain non-US legal entities that were exacerbated by the impacts of COVID-19, and lower overall pretax income.
We are under continuous examination by the Internal Revenue Service (IRS) and tax authorities in other countries and states in which we have significant business operations. The tax years under examination and open for examination vary by jurisdiction. Tax years from 2016 onwards are open for examination by the IRS. In the current period, the IRS commenced its review of the 2017 and 2018 tax years.
We believe it is reasonably possible that our unrecognized tax benefits could decrease within the next 12 months by as much as $113 million, principally as a result of potential resolutions of prior years’ tax items with various taxing authorities. The prior years’ tax items include unrecognized tax benefits relating to the deductibility of certain expenses or losses and the attribution of taxable income to a particular jurisdiction or jurisdictions. Of the $113 million of unrecognized tax benefits, approximately $96 million relates to amounts that, if recognized, would impact the effective tax rate in a future period.