Note 5. Income Taxes

As of September 28, 2014, the Company had a gross amount of unrecognized tax benefits of $479,600 ($311,700 net of federal benefit). As of March 30, 2014, the Company had a gross amount of unrecognized tax benefits of $1,665,000 ($309,400 net of federal benefit). The Company’s unrecognized tax benefit increased by $1,189,000 in the fourth quarter of fiscal 2014, due to a change in its accounting method for certain accrued expenses. This amount was reclassified to income taxes payable in the first three months of fiscal 2015, due to the Company filing an automatic change to its method of accounting for certain accrued expenses with the IRS.

The Company’s accounting policy with respect to interest and penalties related to tax uncertainties is to classify these amounts as part of the provision for income taxes. The total amount of interest and penalties related to tax uncertainties recognized in the consolidated statement of income for the first six months of our fiscal 2015 was $33,100 (net of federal benefit). The cumulative amount included in the consolidated balance sheet as of September 28, 2014 was $328,600 (net of federal benefit). The total amount of interest and penalties related to tax uncertainties recognized in the consolidated statement of income for the first six months of our fiscal 2014 was a benefit of $3,800 (net of federal benefit) due to the expiration of a statute of limitations relating to an uncertain tax position. The cumulative amount of interest and penalties included in the consolidated balance sheet as of March 30, 2014 was $295,500 (net of federal benefit).

A reconciliation of the changes in the gross balance of unrecognized tax benefits, excluding interest is as follows:

Beginning balance at March 30, 2014 of unrecognized tax benefit	$	1,665,000
Decrease due to reclassification to income tax payable		(1,189,000	)
Increases related to current period tax positions		3,600
Ending balance at September 28, 2014 of unrecognized tax benefits	$	479,600