notes to consolidated financial statements note 11 . income taxes 2013 ( continued ) the federal income tax return for 2006 is subject to examination by the irs . in addition for 2007 and 2008 , the irs has invited the company to participate in the compliance assurance process ( 201ccap 201d ) , which is a voluntary program for a limited number of large corporations . under cap , the irs conducts a real-time audit and works contemporaneously with the company to resolve any issues prior to the filing of the tax return . the company has agreed to participate . the company believes this approach should reduce tax-related uncertainties , if any . the company and/or its subsidiaries also file income tax returns in various state , local and foreign jurisdictions . these returns , with few exceptions , are no longer subject to examination by the various taxing authorities before as discussed in note 1 , the company adopted the provisions of fin no . 48 , 201caccounting for uncertainty in income taxes , 201d on january 1 , 2007 . as a result of the implementation of fin no . 48 , the company recognized a decrease to beginning retained earnings on january 1 , 2007 of $ 37 million . the total amount of unrecognized tax benefits as of the date of adoption was approximately $ 70 million . included in the balance at january 1 , 2007 , were $ 51 million of tax positions that if recognized would affect the effective tax rate . a reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows : ( in millions ) .
what is the income before tax in 2007?
the company anticipates that it is reasonably possible that payments of approximately $ 2 million will be made primarily due to the conclusion of state income tax examinations within the next 12 months . additionally , certain state and foreign income tax returns will no longer be subject to examination and as a result , there is a reasonable possibility that the amount of unrecognized tax benefits will decrease by $ 7 million . at december 31 , 2007 , there were $ 42 million of tax benefits that if recognized would affect the effective rate . the company recognizes interest accrued related to : ( 1 ) unrecognized tax benefits in interest expense and ( 2 ) tax refund claims in other revenues on the consolidated statements of income . the company recognizes penalties in income tax expense ( benefit ) on the consolidated statements of income . during 2007 , the company recorded charges of approximately $ 4 million for interest expense and $ 2 million for penalties . provision has been made for the expected u.s . federal income tax liabilities applicable to undistributed earnings of subsidiaries , except for certain subsidiaries for which the company intends to invest the undistributed earnings indefinitely , or recover such undistributed earnings tax-free . at december 31 , 2007 , the company has not provided deferred taxes of $ 126 million , if sold through a taxable sale , on $ 361 million of undistributed earnings related to a domestic affiliate . the determination of the amount of the unrecognized deferred tax liability related to the undistributed earnings of foreign subsidiaries is not practicable . in connection with a non-recurring distribution of $ 850 million to diamond offshore from a foreign subsidiary , a portion of which consisted of earnings of the subsidiary that had not previously been subjected to u.s . federal income tax , diamond offshore recognized $ 59 million of u.s . federal income tax expense as a result of the distribution . it remains diamond offshore 2019s intention to indefinitely reinvest future earnings of the subsidiary to finance foreign activities . total income tax expense for the years ended december 31 , 2007 , 2006 and 2005 , was different than the amounts of $ 1601 million , $ 1557 million and $ 639 million , computed by applying the statutory u.s . federal income tax rate of 35% ( 35 % ) to income before income taxes and minority interest for each of the years. .