Income Taxes

6 Months Ended

Jun. 30, 2012

Income Taxes [Abstract]

Income Taxes

4. Income Taxes

The following table presents the components of our income tax expense for the following periods (dollars in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
Current:
Federal	$	6		$	6		$	13		$	11
State and local		18			69			35			105
Total Current		24			75			48			116
Deferred:
Federal	$	—		$	—		$	—		$	—
State and local		—			—			—			—
Total Deferred		—			—			—			—
Income tax expense	$	24		$	75		$	48		$	116
Effective income tax rate		0.8	%		2.8	%		6.7	%		18.5	%

Our effective tax rate for the three and six month periods ended June 30, 2012 was impacted by a full valuation allowance against all of our deferred tax assets, net of deferred tax liabilities.

As of June 30, 2012 and December 31, 2011, the net deferred tax assets are offset by full valuation allowances because it is not more-likely-than-not that we will realize our deferred tax assets. We did not record the related tax benefits in the United States and state jurisdictions during the three and six month periods ended June 30, 2012. Income tax expense for the three and six month periods ended June 30, 2012 and 2011 includes interest on unrecognized tax benefits and state taxes in certain jurisdictions.

During the three and six month periods ended June 30, 2012, there were no significant changes to the liability for unrecognized tax benefits. All interest and penalties related to unrecognized tax benefits are recorded as a component of income tax. The total amount of unrecognized tax benefits at each of June 30, 2012 and December 31, 2011 was $610,000 and $614,000, respectively. It is reasonably possible that the amount of the total unrecognized tax benefits may change in the next 12 months. However, we do not believe that any anticipated change will be material to the Condensed Consolidated Financial Statements. In March 2012, the Internal Revenue Service began an audit of the 2010 tax year. During the three months ended June 30, 2012, the 2010 audit was completed and there were no audit adjustments.