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INCOME TAXES
6 Months Ended
Jun. 30, 2012
INCOME TAXES [Abstract]  
INCOME TAXES
 
7.            INCOME TAXES

As of June 30, 2012 and December 31, 2011, the Company has approximately $4.0 million and $4.1 million, respectively, of liabilities for uncertain tax positions which, if reversed, would reduce the Company's effective tax rate.  These amounts are included in the liability for uncertain tax positions in the accompanying condensed consolidated balance sheets.

The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction and various states and foreign jurisdictions.  The Company is no longer subject to U.S. federal examinations by tax authorities for years before 2008 and for state examinations before 2006.   Regarding foreign subsidiaries, the Company is no longer subject to examination by tax authorities for years before 2004 in Asia and generally 2006 in Europe.  During September 2010 and April 2011, the Company was notified of an Internal Revenue Service ("IRS") tax audit for the years ended December 31, 2004 through 2009.  The Company settled the domestic and international audits with the IRS for an amount due to the IRS of less than $0.2 million, exclusive of interest expense.  The tax issues related to the $0.2 million tax were included in the liability for uncertain tax positions and were reversed during the quarter ended March 31, 2012.  This resulted in a reduction to the tax provision in the condensed consolidated statement of operations.  Additionally, the Company's wholly-owned subsidiary in Germany has been notified by the German tax authorities of a tax audit for the tax years 2008 through 2010.

As a result of the expiration of the statute of limitations for specific jurisdictions, it is reasonably possible that the related unrecognized benefits for tax positions taken regarding previously filed tax returns may change materially from those recorded as liabilities for uncertain tax positions in the Company's condensed consolidated financial statements at June 30, 2012.  A total of $1.2 million of previously recorded liabilities for uncertain tax positions relates to the 2007 and 2008 tax years in the amounts of $0.9 million and $0.3 million, respectively.  The statute of limitations related to these liabilities, which was scheduled to expire on September 15, 2011 and September 15, 2012, respectively, has been extended under the settlement with the IRS until September 2013.

The Company's policy is to recognize interest and penalties related to uncertain tax positions as a component of the current provision for income taxes.  During the six months ended June 30, 2012 and 2011, the Company recognized no interest and penalties and $0.1 million of interest and penalties, respectively, in the condensed consolidated statements of operations.  The Company has approximately $0.7 million accrued for the payment of interest and penalties at June 30, 2012 and December 31, 2011, which is included in the liability for uncertain tax positions in the accompanying condensed consolidated balance sheets at each date.

In connection with the GigaCom acquisition, the Company has not completed a preliminary fair market value report of property, plant and equipment and intangibles.  At June 30, 2012 there were no deferred tax amounts reported on the condensed consolidated balance sheet.

The Company has made an election under IRC Section 338(g) to step up the tax basis of assets acquired from GigaCom to fair value.  The elections made under Section 338(g) only affect U.S. income taxes (not those of the foreign country where GigaCom is incorporated).

On August 10, 2010, President Obama signed into law the "Education Jobs & Medicaid Assistance Act" (H.R. 1586) (the "Act").  The Act's international tax provisions place certain restrictions on the use of foreign tax credits.  The Company has evaluated the newly-enacted international tax provisions and determined that they do not materially affect the Company's operating results or financial condition.

 
The Company continues to monitor proposed legislation affecting the taxation of transfers of U.S. intangible property and other potential tax law changes.