Income Taxes (Tables)

12 Months Ended

Dec. 31, 2022

Schedule of Income Before Income Tax, Domestic and Foreign [Table Text Block]

The components of International Paper’s earnings from continuing operations before income taxes and equity earnings by taxing jurisdiction were as follows:


In millions	2022		2021		2020
Earnings (loss)
U.S.	$	1,469	$	906	$	660
Non-U.S.	42		93		(331)
Earnings (loss) from continuing operations before income taxes and equity earnings (losses)	$	1,511	$	999	$	329

Schedule of Components of Income Tax Expense (Benefit) [Table Text Block]

The provision (benefit) for income taxes from continuing operations (excluding noncontrolling interests) by taxing jurisdiction was as follows:


In millions	2022		2021		2020
Current tax provision (benefit)
U.S. federal	$	454	$	413	$	98
U.S. state and local	56		47		31
Non-U.S.	27		37		(3)
	$	537	$	497	$	126
Deferred tax provision (benefit)
U.S. federal	$	(775)	$	(274)	$	(2)
U.S. state and local	(39)		(27)		2
Non-U.S.	41		(8)		50
	$	(773)	$	(309)	$	50
Income tax provision (benefit)	$	(236)	$	188	$	176

Schedule of Effective Income Tax Rate Reconciliation [Table Text Block]

A reconciliation of income tax expense using the statutory U.S. income tax rate compared with the actual income tax provision follows:


In millions	2022			2021			2020
Earnings (loss) from continuing operations before income taxes and equity earnings	$	1,511		$	999		$	329
Statutory U.S. income tax rate	21		%	21		%	21		%
Tax expense (benefit) using statutory U.S. income tax rate	317			210			69
State and local income taxes	44			15			26
Impact of rate differential on non-U.S. permanent differences and earnings	1			5			29
Foreign valuation allowance	45			—			—
Tax expense (benefit) on exchange of Sylvamo shares	(56)			—			—
Adjustment to tax basis of assets	—			(14)			—
Non-deductible business expenses	2			1			4
Non-deductible impairments	16			—			92
Non-deductible compensation	13			11			11
Tax audits	6			9			(28)
Timber Monetization Audit Settlement	(604)			—			—
U.S. federal tax rate change	—			—			7
Foreign derived intangible income deduction	(8)			(7)			—
US tax on non-U.S. earnings (GILTI and Subpart F)	27			5			6
Foreign tax credits	8			(6)			(3)
General business and other tax credits	(43)			(39)			(42)
Tax expense (benefit) on equity earnings	(1)			—			8
Other, net	(3)			(2)			(3)
Income tax provision (benefit)	$	(236)		$	188		$	176
Effective income tax rate	(16)		%	19		%	53		%

Schedule of Deferred Tax Assets and Liabilities [Table Text Block]

The tax effects of significant temporary differences, representing deferred income tax assets and liabilities at December 31, 2022 and 2021, were as follows:


In millions	2022		2021
Deferred income tax assets:
Postretirement benefit accruals	$	68	$	84
Pension obligations	18		—
Tax credits	175		199
Net operating and capital loss carryforwards	568		661
Compensation reserves	151		184
Lease obligations	108		92
Environmental reserves	119		104
Other	271		189
Gross deferred income tax assets	$	1,478	$	1,513
Less: valuation allowance (a)	(677)		(708)
Net deferred income tax asset	$	801	$	805
Deferred income tax liabilities:
Intangibles	$	(147)	$	(140)
Investments	(2)		(56)
Right of use assets	(108)		(92)
Pension obligations	—		(34)
Plants, properties and equipment	(1,778)		(1,776)
Forestlands, related installment sales, and investment in subsidiary	(485)		(1,279)
Gross deferred income tax liabilities	$	(2,520)	$	(3,377)
Net deferred income tax liability	$	(1,719)	$	(2,572)

(a) The net change in the total valuation allowance for the years ended December 31, 2022 and 2021 was a decrease of $(31) million and an increase of $27 million, respectively. The net change in the current year includes an increase impacting the future utilization of foreign deferred tax assets of $45 million.

Schedule of Unrecognized Tax Benefits Rollforward [Table Text Block]

A reconciliation of the beginning and ending amount of unrecognized tax benefits for the years ended December 31, 2022, 2021 and 2020 is as follows:


In millions	2022		2021		2020
Balance at January 1	$	(166)	$	(143)	$	(166)
(Additions) reductions for tax positions related to current year	(7)		(13)		(10)
(Additions) for tax positions related to prior years	(10)		(23)		(10)
Reductions for tax positions related to prior years	3		1		30
Settlements	1		10		13
Expiration of statutes of limitations	1		1		1
Currency translation adjustment	1		1		(1)
Balance at December 31	$	(177)	$	(166)	$	(143)

Summary of Operating Loss and Tax Credit Carryforwards [Table Text Block]

The following details the scheduled expiration dates of the Company’s net operating loss and income tax credit carryforwards:


In millions	2023 Through 2032		2033 Through 2042		Indefinite		Total
U.S. federal and non-U.S. NOLs	$	1	$	95	$	422	$	518
State taxing jurisdiction NOLs (a)	43		7		—		50
U.S. federal, non- U.S. and state tax credit carryforwards (a)	70		8		97		175
Total	$	114	$	110	$	519	$	743
Less: valuation allowance (a)	(50)		(89)		(463)		(602)
Total, net	$	64	$	21	$	56	$	141

(a) State amounts are presented net of federal benefit.