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Federal Income Taxes
9 Months Ended
Sep. 30, 2019
Income Tax Disclosure [Abstract]  
Federal Income Taxes Federal Income Taxes

A reconciliation of the effective tax rate to the statutory federal tax rate is shown below (in thousands, except percentages):
 
Three months ended September 30,
 
Nine months ended September 30,
 
2019
 
2018
 
2019
 
2018
 
Amount
 
Rate
 
Amount
 
Rate
 
Amount
 
Rate
 
Amount
 
Rate
Income tax expense before tax on equity in earnings of unconsolidated affiliates
$
17,717

 
13.7
 %
 
$
38,486

 
20.0
 %
 
$
99,323

 
17.3
 %
 
$
64,118

 
19.8
 %
Tax on equity in earnings of unconsolidated affiliates
9,465

 
7.3

 
2,736

 
1.0

 
21,488

 
3.7

 
3,970

 
1.2

Total expected income tax expense at the statutory rate
27,182

 
21.0

 
41,222

 
21.0

 
120,811

 
21.0

 
68,088

 
21.0

Tax-exempt investment income
(1,027
)
 
(0.8
)
 
(830
)
 
(0.4
)
 
(2,945
)
 
(0.5
)
 
(2,509
)
 
(0.8
)
Deferred tax change

 

 

 

 

 

 
(909
)
 
(0.3
)
Dividend exclusion
(817
)
 
(0.6
)
 
(1,064
)
 
(0.5
)
 
(2,598
)
 
(0.4
)
 
(3,050
)
 
(0.9
)
Miscellaneous tax credits, net
(1,521
)
 
(1.2
)
 
(1,252
)
 
(0.6
)
 
(6,512
)
 
(1.1
)
 
(5,994
)
 
(1.8
)
Low income housing tax credit expense
1,324

 
1.0

 
1,251

 
0.6

 
4,265

 
0.7

 
3,755

 
1.2

Noncontrolling interest
(2,284
)
 
(1.8
)
 

 

 
(2,284
)
 
(0.4
)
 

 

Change in valuation allowance
70

 
0.1

 

 

 
235

 

 
2,700

 
0.8

Tax accrual adjustment

 

 
(2,893
)
 
(1.5
)
 

 

 
(2,893
)
 
(0.9
)
Return to provision

 

 
(18,332
)
 
(9.3
)
 

 

 
(18,332
)
 
(5.7
)
Other items, net
(452
)
 
(0.3
)
 
1,117

 
0.8

 
828

 
0.1

 
1,509

 
0.5

Provision for federal income taxes
$
22,475

 
17.4
 %
 
$
19,219

 
10.1
 %
 
$
111,800

 
19.4
 %
 
$
42,365

 
13.1
 %
American National made income tax payments of $58,940,000 and $15,064,000 during the nine months ended September 30, 2019 and 2018, respectively.

As of September 30, 2019, American National had a capital loss carryforward of $575,000. Alternative minimum tax and general business credit carryforwards have been fully utilized. The capital loss carryforward will expire in 2022, if not utilized.

American National’s federal income tax returns for years 2016 to 2018 are subject to examination by the Internal Revenue Service. Tax returns for 2013 to 2015 are subject to examination with certain limitations. In April 2019, American National received notice from the Internal Revenue Service of its intent to audit tax years 2013 to 2016. The audit is ongoing. In the opinion of management, all prior year deficiencies have been paid or adequate provisions have been made for any tax deficiencies that may be upheld. As of September 30, 2019, American National had no provision for uncertain tax positions and no provision for penalties or interest were established. In addition, management does not believe there are any uncertain tax benefits that could be recognized within the next twelve months that would impact American National’s effective tax rate.