INCOME TAXES	9 Months Ended
Mar. 31, 2014
INCOME TAXES
INCOME TAXES	10. INCOME TAXES The provision for income taxes for interim periods is based on the current estimate of the annual effective tax rate expected to be applicable for the full fiscal year and the impact of discrete items, if any, and is adjusted as necessary for quarterly events. The effective income tax rate was 37.0% and 31.3% for the three months ended March 31, 2014 and 2013, respectively, and 33.7% and 35.1% for the nine months ended March 31, 2014 and 2013, respectively. The increase in the effective income tax rate for the three months ended March 31, 2014, when compared to same period in 2013, is primarily attributable to non-deductible transaction costs related to the Acquisition. and favorable discrete items in 2013. The decrease in the effective rate for the nine months ended March 31, 2014, when compared to the same period in 2013, is primarily attributable to a reduction in foreign losses with no future tax benefit and the discrete items related to the Internal Revenue Service (“IRS”) settlement discussed below. The IRS commenced examination of the Company’s U.S. federal income tax returns for 2006 through 2009 during fiscal year 2011. The IRS completed its field examination of the open tax years and issued a Revenue Agent’s Report in January 2012. The Company filed a formal protest regarding certain unagreed adjustments in March 2012 and the case was assigned to the IRS Appeals Office in Laguna Niguel, California. In June 2013, the Company agreed to settle all remaining issues with the IRS. Formal closure of the case occurred in July 2013 and the Company has received a refund from the IRS of $7.7 million, including $0.6 million in interest. As a result, the Company recognized a reduction to unrecognized tax benefits and a corresponding reduction of income tax provisions of approximately $3.6 million in the first quarter of fiscal year 2014. The IRS has commenced examination of the Company’s U.S. federal income tax return for 2012 during fiscal year 2014. The Company files numerous consolidated and separate income tax returns in the United States and various state and foreign jurisdictions. In addition to the IRS examination above, the Company is currently under examination in certain states and foreign jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal, state and local, or foreign income tax examinations for years before fiscal year 2011. As of March 31, 2014, the Company has $11.1 million related to uncertain tax positions, excluding related accrued interest and penalties, $11.0 million of which, if recognized, would impact the effective tax rate. As of March 31, 2014, the Company has $0.4 million accrued for the payment of interest and penalties. It is reasonably possible that the Company’s amount of unrecognized tax benefits may decrease within the next twelve months by a range up to $2.2 million. The Company acquired certain deferred tax assets resulting from the Acquisition, mainly U.S. federal and state tax loss carryforwards of approximately $50 million. The entire amount of the net operating loss carryforwards are subject to limitations under Section 382 of the Internal Revenue Code. Section 382 limits the amount of carryforwards available per year for use against future taxable income. Based on the Company’s recent history of federal taxable income and projections of federal taxable income, the Company expects to utilize all of the federal net operating loss carryforwards. The Company also acquired approximately $21.6 million of foreign tax loss carryforwards $7.7 million of which has a full valuation allowance because the Company does not believe it is more likely than not that we will utilize these losses. The remaining $13.9 million relates to Austrian operations. Based on the Company’s recent history of Austrian taxable income and projections of Austrian taxable income, the Company expects to utilize all of the Austrian net operating loss carryforwards.

10. INCOME TAXES

The provision for income taxes for interim periods is based on the current estimate of the annual effective tax rate expected to be applicable for the full fiscal year and the impact of discrete items, if any, and is adjusted as necessary for quarterly events. The effective income tax rate was 37.0% and 31.3% for the three months ended March 31, 2014 and 2013, respectively, and 33.7% and 35.1% for the nine months ended March 31, 2014 and 2013, respectively. The increase in the effective income tax rate for the three months ended March 31, 2014, when compared to same period in 2013, is primarily attributable to non-deductible transaction costs related to the Acquisition. and favorable discrete items in 2013. The decrease in the effective rate for the nine months ended March 31, 2014, when compared to the same period in 2013, is primarily attributable to a reduction in foreign losses with no future tax benefit and the discrete items related to the Internal Revenue Service (“IRS”) settlement discussed below.

The IRS commenced examination of the Company’s U.S. federal income tax returns for 2006 through 2009 during fiscal year 2011. The IRS completed its field examination of the open tax years and issued a Revenue Agent’s Report in January 2012. The Company filed a formal protest regarding certain unagreed adjustments in March 2012 and the case was assigned to the IRS Appeals Office in Laguna Niguel, California. In June 2013, the Company agreed to settle all remaining issues with the IRS. Formal closure of the case occurred in July 2013 and the Company has received a refund from the IRS of $7.7 million, including $0.6 million in interest. As a result, the Company recognized a reduction to unrecognized tax benefits and a corresponding reduction of income tax provisions of approximately $3.6 million in the first quarter of fiscal year 2014.

The IRS has commenced examination of the Company’s U.S. federal income tax return for 2012 during fiscal year 2014. The Company files numerous consolidated and separate income tax returns in the United States and various state and foreign jurisdictions. In addition to the IRS examination above, the Company is currently under examination in certain states and foreign jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal, state and local, or foreign income tax examinations for years before fiscal year 2011.

As of March 31, 2014, the Company has $11.1 million related to uncertain tax positions, excluding related accrued interest and penalties, $11.0 million of which, if recognized, would impact the effective tax rate. As of March 31, 2014, the Company has $0.4 million accrued for the payment of interest and penalties.

It is reasonably possible that the Company’s amount of unrecognized tax benefits may decrease within the next twelve months by a range up to $2.2 million.

The Company acquired certain deferred tax assets resulting from the Acquisition, mainly U.S. federal and state tax loss carryforwards of approximately $50 million. The entire amount of the net operating loss carryforwards are subject to limitations under Section 382 of the Internal Revenue Code. Section 382 limits the amount of carryforwards available per year for use against future taxable income. Based on the Company’s recent history of federal taxable income and projections of federal taxable income, the Company expects to utilize all of the federal net operating loss carryforwards. The Company also acquired approximately $21.6 million of foreign tax loss carryforwards $7.7 million of which has a full valuation allowance because the Company does not believe it is more likely than not that we will utilize these losses. The remaining $13.9 million relates to Austrian operations. Based on the Company’s recent history of Austrian taxable income and projections of Austrian taxable income, the Company expects to utilize all of the Austrian net operating loss carryforwards.