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Income Taxes
9 Months Ended
Jun. 29, 2013
Income Taxes [Abstract]  
Income Taxes

11. Income Taxes

 

As of June 29, 2013, the Company’s liability for unrecognized tax benefits was $2.0 million, of which $0.8 million would favorably affect the Company’s effective tax rate if recognized. At September 29, 2012, the Company’s liability for unrecognized tax benefits was $1.7 million, of which $0.5 million would favorably affect the Company’s effective tax rate if recognized. As of June 29, 2012, the Company does not expect significant changes in the amount of unrecognized tax benefits during the next twelve months.

 

As was previously disclosed, in the fourth quarter of fiscal year 2012, the Company reached an agreement with the U.S. Department of Commerce (“DOC”) and the U.S. Attorney’s Office for the District of Minnesota (“USAO”), settling for $7.8 million the DOC and USAO’s investigation into the Company’s past disclosures on its government certifications and its government contracting compliance policies, general compliance record and practices in areas including export controls and government contracts. During the third quarter of fiscal year 2012, the Company accrued a loss contingency equal to the settlement amount. The $7.8 million accrual was non-deductible for income tax purposes.

 

On January 2, 2013, the American Taxpayer Relief Act of 2012 (Act) was signed into law. The Act includes legislation that reinstated the United States Research and Development (R&D) tax credit retroactively from January 1, 2012 and extends it through December 31, 2013. As a result of this legislation, during fiscal year 2013, the Company recognized a tax benefit of approximately $1.0 million for the retroactive period January 1, 2012 through September 29, 2012.