INCOME TAXES
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Dec. 31, 2013
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Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | INCOME TAXES Deferred tax assets (liabilities) included in the balance sheet as of December 31, 2013 and 2012 are as follows (in thousands):
At December 31, 2013 and 2012, the Company had a $0 and $807,000, respectively, deferred tax asset related to a capital loss carryforward. The capital loss could only be offset against capital gains and expired in the 2013 tax year. The Company had recorded a deferred tax asset valuation allowance fully offsetting the capital loss at December 31, 2012. Tax expense (benefit) for the years ended December 31, 2013, 2012 and 2011 is as follows (in thousands):
A reconciliation of the federal statutory tax rate to the effective tax rate on continuing operations applicable to income before income tax expense (benefit) follows:
The Company’s income (loss) before tax from foreign entities was $(5.7) million, $8.0 million and $12.4 million for the years ended December 31, 2013, 2012 and 2011, respectively. The Company plans to continue to finance expansion and operating requirements of subsidiaries outside the U.S. through reinvestment of the undistributed earnings of these subsidiaries (approximately $43 million at December 31, 2013), and taxes that would result from potential distributions have not been provided. If earnings were distributed, additional taxes payable would be eliminated substantially by available tax credits arising from taxes paid outside the United States. An uncertain tax position represents the Company’s expected treatment of a tax position taken in a filed tax return, or planned to be taken in a tax return not yet filed, that has not been reflected in measuring income tax expense for financial reporting purposes. At December 31, 2013 and 2012 the Company has recorded a liability of $2.6 million and $2.5 million, respectively, which consists of unrecognized tax benefits of $2.4 million and $2.2 million, respectively, and estimated accrued interest and penalties of $259,000 and $311,000, respectively. The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. During the years ended December 31, 2013, 2012 and 2011, interest and penalties recorded in the consolidated statements of operations were $(52,000), $(50,000) and $100,000, respectively. Following is a reconciliation of the amounts of unrecognized tax benefits for the year ended December 31, 2013, 2012 and 2011 (in thousands):
The balance of unrecognized tax benefits of $2.6 million and $2.5 million, as of December 31, 2013 and 2012, respectively, if recognized, would affect the effective tax rate. The Company files income tax returns in the U.S. federal jurisdiction, and various state, local and foreign jurisdictions. The Company is generally no longer subject to examinations by tax authorities for its U.S. federal and foreign tax returns for years prior to 2010; or for its U.S. state and local tax returns for years prior to 2009. The Company believes it is reasonably possible that as much as approximately $148,000 of its unrecognized tax benefits may be recognized by the end of 2014 as a result of a lapse of the statute of limitations. |