Company: SREA
Filing Date: 2025-02-25
Form Type: 10-K
Source: 0001032208-25-000012
Chunk: 431

Company: SEMPRA
Filing Date: 2025-02-25
Form: 10-K
Item: Item 1
Chunk 431
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 current period tax positions— — 4 Settlements with tax authorities— (2)— Balance at December 31$29 $29 $77 Of December 31 balance, amounts related to tax positions that if recognizedin future years woulddecrease the effective tax rate(1)$(29)$(29)$(67)increase the effective tax rate(1)— — 37 (1)    Includes temporary book and tax differences that are treated as flow-through for ratemaking purposes, as discussed above.The California Franchise Tax Board is examining Sempra’s California unitary group for tax years 2018 and 2019. As of December 31, 2024, it is not reasonably possible this matter could be resolved within the next 12 months. We have included an increase in unrecognized income tax benefits in the reconciliation above.In April 2023, the IRS issued Revenue Procedure 2023-15, which provides a safe harbor method of accounting for gas repairs expenditures. SDG&E and SoCalGas elected this change in tax accounting method in Sempra’s consolidated 2023 income tax return filing and recorded additional income tax benefits of $34 million and $97 million, respectively, in 2023. Additionally, SoCalGas updated its assessment of prior years’ unrecognized income tax benefits and recorded an income tax benefit of $43 million in 2023 for previously unrecognized income tax benefits pertaining to gas repairs expenditures. Sempra elected this change in tax accounting method in its consolidated 2023 income tax return filing.Sempra, SDG&E, and SoCalGas record regulatory liabilities for benefits that will be flowed through to customers in the future.

2024 Form 10-K  |  F-80

It is reasonably possible that within the next 12 months, unrecognized income tax benefits could decrease due to the following:POSSIBLE DECREASES IN UNRECOGNIZED INCOME TAX BENEFITS WITHIN 12 MONTHS(Dollars in millions) December 31, 202420232022Sempra: Potential resolution of audit issues with various U.S. federal, state and localand non-U.S. taxing authorities$15 $242 $8 SDG&E: Potential resolution of audit issues with various U.S. federal, state and localtaxing authorities$6 $6 $6 SoCalGas: Potential resolution of audit issues with various U.S. federal, state and localtax