INCOME TAXES
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Dec. 31, 2011
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Text Block] | INCOME TAXES The Company’s Federal and state income tax expense (benefit) is summarized in the following table (in thousands):
The effect of temporary differences that give rise to a significant portion of deferred taxes is as follows (in thousands):
During the fourth quarter of 2010, the Company concluded that it was more likely than not that its deferred tax assets would not be realized. Accordingly, a valuation allowance of $56.2 million was recorded against all of the Company's deferred tax assets as of December 31, 2010. The Company continually assesses the necessity of a valuation allowance. Based on this assessment, the Company concluded that a valuation allowance, in the amount of $52.2 million, was required as of December 31, 2011. If the Company determines in a future period that it is more likely than not that part or all of the deferred tax assets will be realized, the Company will reverse part or all of the valuation allowance. During the fourth quarter of 2009, based upon a similar evaluation of positive and negative evidence, the Company concluded that the valuation allowance in the amount of $44.8 million was no longer required. As part of its analysis, the Company evaluated, among other factors, its recent history of generating taxable income, the underlying factors which resulted in the goodwill impairment charge that was incurred during the fourth quarter of 2008, and its near-term forecast of future taxable income. After considering these factors, the Company concluded that a reversal of the valuation allowance was appropriate. Accordingly, the Company recognized a tax benefit of $44.8 million during the 2009. At December 31, 2011, the Company had Federal net operating loss (“NOL”) carry forwards of approximately $42.7 million, none of which is subject to an annual limitation, which will begin expiring in 2012 and later. However, 90% of the NOL carry forwards do not expire until 2026 or later. Of the Company’s $42.7 million Federal NOLs, $12.1 million will be recorded in additional paid-in capital when realized as these NOLs are related to the exercise of non-qualified stock options and restricted stock grants. The Company has post-apportioned state NOL carry forwards of approximately $72.1 million, the majority of which will begin expiring in 2017 and later. The Company’s reconciliation of the statutory rate to the effective income tax rate is as follows (in thousands):
As of December 31, 2011, the Company had $2.6 million of total gross unrecognized tax benefits, all of which, if recognized, would favorably affect the effective income tax rate in future periods. A reconciliation of the beginning and ending amount of gross unrecognized tax benefits is as follows (in thousands):
The Company's policy for recording interest and penalties associated with uncertain tax positions is to record such items as a component of income tax expense in the statement of operations. As of December 31, 2011 and December 31, 2010, the Company had approximately $0.4 million and $0.5 million of accrued interest related to uncertain tax positions, respectively. The Company files income tax returns, including returns for its subsidiaries, with Federal, state and local jurisdictions. The Company's uncertain tax positions are related to tax years that remain subject to examination. As of December 31, 2011, U.S. tax returns for the years 2008 through 2011 remain subject to examination by Federal tax authorities. Tax returns for the years 2007 through 2011 remain subject to examination by state and local tax authorities for a majority of the Company's state and local filings. |