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Income Taxes
6 Months Ended
Jul. 30, 2011
Income Taxes
NOTE 13.  Income Taxes

As of the end of the second quarter of fiscal 2011 and as of the end of fiscal 2010, the total liability for income tax associated with unrecognized tax benefits was $2.6 million ($2.2 million net of federal benefit), of which $0.4 million ($0.2 million net of federal benefit) related to interest and $0.2 million related to penalties.

We believe that it is reasonably possible that $0.6 million ($0.2 million net of federal benefit) of our liability for unrecognized tax benefits of which $0.2 million ($0.1 million net of federal benefit) of associated interest, may be recognized in the next 12 months due to the settlement of audits and the expiration of statutes of limitations.  As such, we have classified this amount as a current liability.

Our continuing practice is to recognize interest and penalties related to unrecognized tax benefits as a tax expense.  Tax expense during the second quarter of fiscal 2011 and 2010 related to interest and penalties was not material.  As of the end of the second quarter of fiscal 2011 and as of the end of fiscal 2010, we had accrued $0.6 million of interest and penalties related to uncertain tax positions.

We operate stores throughout the United States, Canada and Puerto Rico, and as a result, we file income tax returns in the U.S. federal jurisdiction and various state, local and foreign jurisdictions.  In the normal course of business, we are subject to examination by taxing authorities.  With few exceptions, we are no longer subject to U.S. federal, state, local or foreign income tax examinations for years before fiscal 2004.  While it is often difficult to predict the final outcome or the timing or resolution of any particular uncertain tax position, we believe our reserves for income taxes represent the most probable outcome.  We adjust these reserves, as well as the related interest and penalties, in light of changing facts and circumstances.  The adjustment of these reserves could impact our effective tax rate for a particular future period.