Business is conducted in various countries throughout the world and is subject to tax in numerous jurisdictions. A significant number of tax returns that are filed are subject to examination by various Federal, state and local tax authorities. Tax examinations are often complex, as tax authorities may disagree with the treatment of items reported requiring several years to resolve. Liabilities are established for possible assessments by tax authorities resulting from known tax exposures including, but not limited to, transfer pricing matters, tax credit deductibility of certain expenses, and deemed repatriation transition tax. Such liabilities represent a reasonable provision for taxes ultimately expected to be paid and may need to be adjusted over time as more information becomes known. The effect of changes in estimates related to contingent tax liabilities is included in the effective tax rate reconciliation above. A reconciliation of the beginning and ending amount of gross unrecognized tax benefits is as follows (excluding interest and penalties): Additional information regarding unrecognized tax benefits is as follows: Accrued interest and penalties payable for unrecognized tax benefits are included in either current or non-current income taxes payable. Interest and penalties related to unrecognized tax benefits are included in income tax expense. BMS is currently under examination by a number of tax authorities which have proposed or are considering proposing material adjustments to tax positions for issues such as transfer pricing, certain tax credits and the deductibility of certain expenses. BMS received several notices of proposed adjustments from the IRS related to transfer pricing and other tax positions for the 2008 to 2012 tax years. It is reasonably possible that new issues will be raised by tax authorities which may require adjustments to the amount of unrecognized tax benefits; however, an estimate of such adjustments cannot reasonably be made at this time. It is also reasonably possible that the total amount of unrecognized tax benefits at December 31, 2020 could decrease in the range of approximately $375 million to $415 million in the next twelve months as a result of the settlement of certain tax audits and other events. The expected change in unrecognized tax benefits may result in the payment of additional taxes, adjustment of certain deferred taxes and/or recognition of tax benefits. The following is a summary of major tax jurisdictions for which tax authorities may assert additional taxes based upon tax years currently under audit and subsequent years that will likely be audited: 93 Year Ended December 31, Dollars in Millions 2020 2019 2018 Balance at beginning of year $ 1,905  $ 995  $ 1,155  Gross additions to tax positions related to current year 76  170  48  Gross additions to tax positions related to prior years 325  19  21  Gross additions to tax positions assumed in acquisitions 51  852  —  Gross reductions to tax positions related to prior years (352) (35) (106) Settlements (7) (23) 2  Reductions to tax positions related to lapse of statute (5) (72) (119) Cumulative translation adjustment 10  (1) (6) Balance at end of year $ 2,003  $ 1,905  $ 995  Year Ended December 31, Dollars in Millions 2020 2019 2018 Unrecognized tax benefits that if recognized would impact the effective tax rate $ 1,900  $ 1,809  $ 853  Accrued interest 366  292  167  Accrued penalties 20  10  11  U.S. 2008 to 2020 Canada 2012 to 2020 France 2016 to 2020 Germany 2008 to 2020 Italy 2016 to 2020 Japan 2015 to 2020 Switzerland 2016 to 2020 UK 2012 to 2020