MGIC Investment Corp. reached agreement on all issues in its legal dispute with the Internal Revenue Service, according to a Form 10-K filing.
The case, which the U.S. Tax Court consolidated with similar ones involving Radian Group Inc. in February 2016, revolved around MGIC's tax treatment of its investment in a portfolio of the residual interests of a group of real estate mortgage investment conduits.
In the fourth quarter of 2017, the IRS submitted documentation reflecting the terms of the agreement to the Joint Committee on Taxation for its review, which must happen before a settlement can be completed.
MGIC recorded a provision for additional taxes and interest of $29.0 million in 2017. If the settlement is not completed, MGIC said it would need to make further adjustments, which could be material, to its tax provision and liabilities.