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Income Taxes
3 Months Ended
Oct. 31, 2017
Income Tax Disclosure [Abstract]  
Income Taxes
Income Taxes
The Company files income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. With few exceptions, the Company is no longer subject to state and foreign income tax examinations by tax authorities for years before 2008. The United States Internal Revenue Service (IRS) has completed examinations of the Company’s U.S. federal income tax returns through 2013. Currently, the Company is under examination by the IRS for fiscal years 2015 and 2016.
As of October 31, 2017, the gross unrecognized tax benefits were $19.6 million and accrued interest and penalties on these unrecognized tax benefits were $2.5 million. The Company recognizes accrued interest and penalties related to unrecognized tax benefits in income tax expense. If the Company were to prevail on all unrecognized tax benefits recorded, substantially all of the unrecognized tax benefits would benefit the effective tax rate. With an average statute of limitations of approximately five years, up to $2.6 million of the unrecognized tax benefits could potentially expire in the next 12-month period, unless extended by an audit.
It is reasonably possible that matters associated with either current or future audits and disputes could cause adjustments to previously recorded reserves in the next 12-month period. Quantification of an estimated range and timing of future audit adjustments cannot be made at this time.