XML 34 R11.htm IDEA: XBRL DOCUMENT v2.4.0.6
Income Taxes
6 Months Ended
Jun. 30, 2012
Income Tax Disclosure [Abstract]  
Income Taxes
Income Taxes
 
The Company determines its deferred tax assets and liabilities based upon the difference between the financial statement and tax bases of its assets and liabilities, calculated using enacted applicable tax rates.  The Company then assesses the likelihood that its deferred tax assets will be recovered from future taxable income and, to the extent it believes that recovery is not likely, a valuation allowance is established.  Changes in the valuation allowance, when recorded, are included in the provision for income taxes in the condensed consolidated financial statements.
 
The Company’s unrecognized tax benefits of $4,015 and $3,746 at June 30, 2012 and December 31, 2011, respectively, are uncertain tax positions that would impact the Company’s effective tax rate if recognized.  The Company is periodically engaged in tax return examinations, reviews of statute of limitations periods, and settlements surrounding income taxes. The Company does not anticipate a material change in its unrecognized tax benefits during the next twelve months.
 
The Company classifies interest expense and penalties as part of its provision for income taxes based upon applicable federal and state interest/underpayment percentages.  The Company has accrued $1,290 and $1,239 in interest and penalties in its condensed consolidated balance sheets at June 30, 2012 and December 31, 2011, respectively.  Interest was computed on the difference between the provision for income taxes recognized in accordance with US GAAP and the amount of benefit previously taken or expected to be taken in the Company’s federal, state, and local income tax returns.
 
The Company's federal income tax returns for the tax years 2008 and forward are available for examination by the United States Internal Revenue Service (“IRS”).  The Company's 2008 and 2009 federal income tax returns are currently under audit examination by the IRS. This examination commenced during June 2011 and is expected to be completed during 2012. Since the audit process has not yet concluded, the audit outcome cannot yet be evaluated. The Company has agreed to extend its federal statute of limitations for the 2008 tax year, which will expire on March 31, 2013, unless further extended.  The Company's state income tax returns for 2007 through 2011 remain subject to examination by various state authorities, with the latest period closing on December 31, 2016.  The Company has extended the statute of limitations in one state jurisdiction for the tax year 2006. The Company has not extended the statutes of limitations in any other state jurisdictions with respect to years prior to 2007.  Such statutes of limitations will expire on or before November 15, 2012, unless extended.