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Income Taxes
9 Months Ended
Sep. 30, 2013
Income Tax Disclosure [Abstract]  
Income Taxes
Income Taxes

The Company’s tax provision for interim periods is determined using an estimate of the Company’s annual effective tax rate. Each quarter the Company updates its estimated annual effective tax rate and, if the estimate changes, makes a cumulative adjustment. j2 Global’s annual effective tax rate is normally lower than the 35% U.S. federal statutory rate and applicable apportioned state tax rates primarily due to anticipated earnings of the Company’s subsidiaries outside of the U.S. in jurisdictions where the Company’s effective tax rate is lower than in the U.S. For the quarter ended September 30, 2013, the effective tax rate was 20.5%.  j2 Global does not provide for U.S. income taxes on the undistributed earnings of the Company’s foreign operations because the Company intends to reinvest such earnings in foreign jurisdictions.  Income before income taxes included income from domestic operations of $56.0 million and $38.5 million for the nine months ended September 30, 2013 and 2012, respectively, and income from foreign operations of $54.8 million and $78.7 million for the nine months ended September 30, 2013 and 2012, respectively.

As of September 30, 2013 and December 31, 2012, the Company had $41.5 million and $37.7 million, respectively, in liabilities for uncertain income tax positions. Accrued interest and penalties related to unrecognized tax benefits are recognized in income tax expense on the Company’s consolidated statement of income.

Cash paid for income taxes net of refunds received was $23.4 million for the nine months ended September 30, 2013.

Certain taxes are prepaid during the year and included within prepaid expenses and other current assets on the consolidated balance sheet. The Company’s prepaid taxes were $14.1 million and $9.0 million at September 30, 2013 and December 31, 2012, respectively.

j2 Global is currently under income tax audit by the California Franchise Tax Board (“FTB”) for tax years 2005 through 2007, and during the second quarter of 2013 received notice that the FTB will also be auditing it for tax years 2009 through 2011. The FTB has also issued Information Document Requests regarding the 2008 tax year, although the Company has not received a formal notice of audit for that year. The Company is also currently under income tax audit by the U.S. Internal Revenue Service ("IRS") for tax years 2009 and 2010, and during the second quarter of 2013 received notice that the IRS will be auditing it for tax year 2011 as well. In addition, the Company is under income tax audit by the Canada Revenue Agency (“CRA”) for tax years 2010 through 2011. During the third quarter of 2013, the Company was notified by the CRA that the income tax audit for tax years 2008 and 2009 had concluded with no changes and that tax year 2011 would be subject to income tax audit. The Company is also under CRA audit for Goods and Services Tax for tax years 2009 through 2011. It is possible that some or all of these audits may conclude in the next 12 months and that the unrecognized tax benefits the Company has recorded in relation to these tax years may change compared to the liabilities recorded for these periods. However, it is not currently possible to estimate the amount, if any, of such change.
 
j2 Global is also under audit by various state and local governments for non-income related taxes.