Table of Contents Reconciliation of unrecognized tax benefits:  1 Years ended December 31, (Millions of dollars) 2018 2017 2016 Balance at January 1, $ 1,286 $ 1,032 $ 968 Additions for tax positions related to current year 61 270 73 Additions for tax positions related to prior years 461 20 55 Reductions for tax positions related to prior years (5) (27) (36) Reductions for settlements $^{2}$  (6) (9) (24) Reductions for expiration of statute of limitations (1) — (4) Balance at December 31, $ 1,796 $ 1,286 $ 1,032 Amount that, if recognized, would impact the effective tax rate $ 1,716 $ 1,209 $ 963 1 Foreign currency impacts are included within each line as applicable. 2 Includes cash payment or other reduction of assets to settle liability. We classify interest and penalties on income taxes as a component of the provision for income taxes. We recognized a net provision for interest and penalties of $42 million, $38 million and $34 million during the years ended December 31, 2018, 2017 and 2016, respectively. The total amount of interest and penalties accrued was $190 million and $157 million as of December 31, 2018 and 2017, respectively. On January 31, 2018, we received a Revenue Agent's Report from the IRS indicating the end of the field examination of our U.S. income tax returns for 2010 to 2012. In the audits of 2007 to 2012 including the impact of a loss carryback to 2005, the IRS has proposed to tax in the United States profits earned from certain parts transactions by Caterpillar SARL (CSARL), based on the IRS examination team’s application of the “substance-over-form” or “assignment-of-income” judicial doctrines. We are vigorously contesting the proposed increases to tax and penalties for these years of approximately $2.3 billion. We believe that the relevant transactions complied with applicable tax laws and did not violate judicial doctrines. We have filed U.S. income tax returns on this same basis for years after 2012. Based on the information currently available, we do not anticipate a significant change to our unrecognized tax benefits for this position within the next 12 months. We currently believe the ultimate disposition of this matter will not have a material adverse effect on our consolidated financial position, liquidity or results of operations. With the exception of a loss carryback to 2005, tax years prior to 2007 are generally no longer subject to U.S. tax assessment. In our major non- U.S. jurisdictions including Australia, Brazil, China, Germany, Japan, Mexico, Switzerland, Singapore and the U.K., tax years are typically subject to examination for three to ten years. Due to the uncertainty related to the timing and potential outcome of audits, we cannot estimate the range of reasonably possible change in unrecognized tax benefits in the next 12 months. 7. Cat Financial Financing Activities A. Wholesale inventory receivables Wholesale inventory receivables are receivables of Cat Financial that arise when Cat Financial provides financing for a dealer’s purchase of inventory. These receivables are included in Receivables—trade and other and Long-term receivables—trade and other in Statement 3 and were $1,308 million and $1,398 million, at December 31, 2018 and 2017, respectively. 97