Radian Group Inc. Notes to Consolidated Financial Statements - (Continued) The effect of unrecognized tax benefits on our consolidated balance sheets and results of operations is as follows:  A reconciliation of the beginning and ending unrecognized tax benefits is as follows:  We have taken a position in various jurisdictions that we are not required to remit taxes with regard to the income  generated from our investment in certain partnership interests.  Although we believe that these tax positions are more likely than  not to succeed if adjudicated in a court of last resort, measurement under this standard of the potential amount of liability for  state and local taxes and the potential for penalty and interest thereon is performed on a quarterly basis. Our net unrecognized  tax benefits related to prior years increased by approximately  $23.0 million. This net increase primarily reflects the impact of  unrecognized tax benefits associated with our recognition of certain premium income.  Although unrecognized tax benefits for  this item decreased by approximately $23.3 million due to the expiration of the applicable statute of limitations for the taxable  period ended December 31, 2008, the related amounts continued to impact subsequent years resulting in a corresponding  increase to the unrecognized tax benefits related primarily to the 2009 taxable year . In January 2013, we were notified that  Appeals rejected our latest settlement of fer and plans to issue a formal notice of  deficiency within three to six months. Based on these recent developments, we do not currently believe that a settlement is  likely, in which case we would likely litigate the disputed amounts. Over the next twelve months, if we determine that a  compromised settlement cannot be reached with  Appeals, then it is estimated that approximately  $65.2 million of unrecognized  tax benefits in the above tabular reconciliation may be reversed pursuant to the accounting standard for uncertain tax positions. In the event we are not successful in defense of our tax positions taken for U.S. Federal income tax purposes, and for  which we have recorded unrecognized tax benefits, then such adjustments originating in NOL  or NOL carryback years may  serve as a reduction to our existing NOL.  244 Year Ended December 31, (In thousands) 2012 2011 Balance at beginning of period. . . . . . . . . . . . . . . . . . . . . . . . $ 125,757 $ 92,845 Tax positions related to the current year: Increases. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,209 1,268 Decreases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,624 ) (2,005 ) Tax positions related to prior years: Increases. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27,302 51,480 Decreases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4,243 ) (17,831 ) Lapses of applicable statute of limitation. . . . . . . . . . . . . . . . (34,388 ) — Balance at end of period. . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 114,013 $ 125,757 (In thousands) December 31, 2011 Decrease December 31, 2012 Unrecognized tax benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 125,757 $ (11,744 ) $ 114,013 Unrecognized tax benefits that, if recognized, would affect the effective tax rate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 61,901 $ (2,907 ) $ 58,994 Interest and penalties accrued. . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 53,842 $ (840 ) $ 53,002 Interest and penalties charged to income tax benefit. . . . . . . . . . . $ (840 )