11.

INCOME TAXES

The provision (benefit) for income taxes on continuing operations are as follows:


	Year ended June 30,
	2014			2013			2012
Current	$	324		$	(4,220	)	$	(768	)
Deferred		(236	)		2,914			203

Total income tax expense (benefit)	$	88		$	(1,306	)	$	(565	)

Net deferred income tax assets recorded in the consolidated balance sheets are as follows:


	June 30,
	2014			2013
Net operating loss carryforward	$	4,288		$	3,279
Depreciation expense		(2,099	)		(2,546	)
Allowances for receivables		2,341			2,571
EHR Deferred gain		0			461
Accrued expenses		1,549			1,868
Intangible assets		3,223			3,762
Pension liabilities		218			313
Other		467			564

		9,987			10,272
Less valuation allowance		(2,577	)		(2,151	)

Net deferred income tax assets	$	7,410		$	8,121

The differences between income taxes on continuing operations at the Federal statutory rate and the effective tax rate were as follows:


	Year ended June 30,
	2014			2013			2012
Income tax at Federal statutory rate	$	(443	)	$	(983	)	$	(909	)
Changes in valuation allowance—continuing operations		427			106			(33	)
U.S. state income taxes, net of federal benefit		31			(476	)		(9	)
Share option expense		16			29			31
Amortization		1			0			316
Other		56			18			39

Total income tax expense (benefit)—continuing operations	$	88		$	(1,306	)	$	(565	)

The Company provided a $2,577 deferred tax valuation allowance as of June 30, 2014 so that the net deferred income tax assets were $7,410 as of June 30, 2014. Based upon management’s assessment, the Company determined that it was more likely than not that a portion of its deferred tax asset would not be recovered. The increase in the valuation allowance during the fiscal year ended June 30, 2014 resulted from reserving for certain state net operating loss carryforwards that were not reserved for in prior periods. It is more likely than not that these net operating loss carryforwards will not be realized in future years. The Company provided a $2,151 deferred tax valuation allowance as of June 30, 2013 so that the net deferred tax assets were $8,121 as June 30, 2013. The net operating loss carryforwards expire in 2023.

The Company accounts for uncertainty in income taxes for a change in judgment related to prior years’ tax positions in the quarter of such change. The Company classifies interest and penalties related to unrecognized tax benefits as part of its provision for income taxes. Accordingly, included in the liability for unrecognized tax benefits was a liability of $229 as of June 30, 2013. There was no liability for unrecognized tax benefits as of June 30, 2014.

A reconciliation of the beginning and ending amounts of unrecognized tax benefits, included interest and penalties from July 1, 2010 through June 30, 2014 is presented below:


Balance at June 30, 2011	$	37
Reductions for tax positions of prior years		(18	)

Balance at June 30, 2012		19
Additions based on tax positions related to current year		218
Reductions for tax positions related to current year		(1	)
Reductions for tax positions of prior years		(7	)

Balance at June 30, 2013		229
Reductions for tax positions of prior years		(229	)

Balance at June 30, 2014	$	0