Income Taxes	3 Months Ended
Mar. 31, 2013
Income Taxes
Income Taxes	Note 13: Income Taxes The Company’s effective tax rates on pretax loss were an expense of 26.0% and a benefit of 48.7% for the three months ended March 31, 2013 and 2012 respectively. The effective tax rate for the three months ended March 31, 2013 was lower than the statutory rate primarily due to an increase in the Company’s valuation allowances against federal and state net operating loss carryforwards and foreign tax credits, tax effects of foreign exchange gains and losses on intercompany notes and certain immaterial prior period adjustments. These negative adjustments were partially offset by state tax benefits and net income attributable to noncontrolling interests from pass through entities for which there was no tax expense provided. As a result of the Company recording pretax losses in each of the periods, the favorable impacts caused increases to the effective tax rate, while the unfavorable impacts caused decreases to the effective tax rate. The most significant driver to the decrease in the effective rates in 2013 compared to 2012 is the increase in the valuation allowance against federal and state net operating loss carryforwards. The effective tax rate for the three months ended March 31, 2012 was greater than the statutory rate primarily due to state tax benefits, a decrease in the Company’s liability for unrecognized tax benefits, net income attributable to noncontrolling interests from pass through entities for which there was no tax expense provided, foreign income taxed at lower effective rates and certain immaterial prior period tax adjustments. These positive adjustments were partially offset by an increase in the Company’s valuation allowances against foreign tax credits and unrealized investment losses. The Company projects that its deferred tax assets will exceed its deferred tax liabilities as of December 31, 2013. As a result, the Company determined that it is not more likely than not that it would be able to realize the value of its federal and combined state net operating loss carryforwards and has recorded a valuation allowance against a portion of these carryforwards. This valuation allowance is expected to increase over time as the Company’s deferred tax liabilities continue to decrease and will have a continuing adverse impact on the Company’s effective tax rate in the future. The balance of the Company’s liability for unrecognized tax benefits was approximately $288 million as of March 31, 2013. The Company anticipates it is reasonably possible that its liability for unrecognized tax benefits may decrease by approximately $127 million within the next twelve months as the result of the possible closure of its 2005 through 2007 federal tax years, potential settlements with certain states and foreign countries and the lapse of the statute of limitations in various state and foreign jurisdictions. The potential decrease relates to various federal, state and foreign tax benefits including research and experimentation credits, transfer pricing adjustments and certain amortization and loss deductions. In addition to the liability discussed above, the balance of the uncertain income tax liability for which The Western Union Company is required to indemnify the Company was approximately $4 million as of March 31, 2013. The Company anticipates that it is reasonably possible that the uncertain income tax liability may decrease by approximately $4 million within the next twelve months as a result of the possible closure of the 2005 and 2006 federal tax years.

Note 13: Income Taxes

The Company’s effective tax rates on pretax loss were an expense of 26.0% and a benefit of 48.7% for the three months ended March 31, 2013 and 2012 respectively. The effective tax rate for the three months ended March 31, 2013 was lower than the statutory rate primarily due to an increase in the Company’s valuation allowances against federal and state net operating loss carryforwards and foreign tax credits, tax effects of foreign exchange gains and losses on intercompany notes and certain immaterial prior period adjustments. These negative adjustments were partially offset by state tax benefits and net income attributable to noncontrolling interests from pass through entities for which there was no tax expense provided. As a result of the Company recording pretax losses in each of the periods, the favorable impacts caused increases to the effective tax rate, while the unfavorable impacts caused decreases to the effective tax rate. The most significant driver to the decrease in the effective rates in 2013 compared to 2012 is the increase in the valuation allowance against federal and state net operating loss carryforwards.

The effective tax rate for the three months ended March 31, 2012 was greater than the statutory rate primarily due to state tax benefits, a decrease in the Company’s liability for unrecognized tax benefits, net income attributable to noncontrolling interests from pass through entities for which there was no tax expense provided, foreign income taxed at lower effective rates and certain immaterial prior period tax adjustments. These positive adjustments were partially offset by an increase in the Company’s valuation allowances against foreign tax credits and unrealized investment losses.

The Company projects that its deferred tax assets will exceed its deferred tax liabilities as of December 31, 2013. As a result, the Company determined that it is not more likely than not that it would be able to realize the value of its federal and combined state net operating loss carryforwards and has recorded a valuation allowance against a portion of these carryforwards. This valuation allowance is expected to increase over time as the Company’s deferred tax liabilities continue to decrease and will have a continuing adverse impact on the Company’s effective tax rate in the future.

The balance of the Company’s liability for unrecognized tax benefits was approximately $288 million as of March 31, 2013. The Company anticipates it is reasonably possible that its liability for unrecognized tax benefits may decrease by approximately $127 million within the next twelve months as the result of the possible closure of its 2005 through 2007 federal tax years, potential settlements with certain states and foreign countries and the lapse of the statute of limitations in various state and foreign jurisdictions. The potential decrease relates to various federal, state and foreign tax benefits including research and experimentation credits, transfer pricing adjustments and certain amortization and loss deductions.

In addition to the liability discussed above, the balance of the uncertain income tax liability for which The Western Union Company is required to indemnify the Company was approximately $4 million as of March 31, 2013. The Company anticipates that it is reasonably possible that the uncertain income tax liability may decrease by approximately $4 million within the next twelve months as a result of the possible closure of the 2005 and 2006 federal tax years.