Federal Income Taxes

3 Months Ended

Mar. 31, 2020

A reconciliation of the effective tax rate to the statutory federal tax rate is shown below (in thousands, except percentages):


	Three months ended March 31,
	2020						2019
	Amount		Rate		Amount		Rate
Income tax expense (benefit) before tax on equity in earnings of unconsolidated affiliates	$	(62,694)	22.2	%	$	59,787	18.4	%
Tax on equity in earnings of unconsolidated affiliates	3,298		(1.2)		8,497		2.6
Total expected income tax expense at the statutory rate	(59,396)		21.0		68,284		21.0
Tax-exempt investment income	(1,027)		0.4		(809)		(0.2)

Dividend exclusion	(862)		0.3		(921)		(0.3)
Miscellaneous tax credits, net	(2,395)		0.8		(1,692)		(0.5)
Low income housing tax credit expense	1,774		(0.6)		1,158		0.3

Change in valuation allowance	112		—		—		—


Other items, net	126		(0.1)		1,357		0.4
Provision (benefit) for federal income taxes	$	(61,668)	21.8	%	$	67,377	20.7	%

American National did not make tax payments during the three months ended March 31, 2020. Income tax payments of $23,600,000 were made during the three months ended March 31, 2019.

As of March 31, 2020 and December 31, 2019, American National had no material net operating loss or tax credit carryforwards.

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 March 31, 2020, 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.