Income Taxes

6 Months Ended

Jun. 30, 2011

Income Taxes

Income Taxes

Note 10. Income Taxes

The total amount of unrecognized tax benefits that would affect the effective tax rate if recognized was $1.08 million at June 30, 2011 and $1.52 million at December 31, 2010.  Interest and penalties were recognized through the income tax provision.  For the six months ending June 30, 2011 and the twelve months ending December 31, 2010, we recognized approximately $(0.07) million and $0.05 million in interest, net of tax effect, and penalties, respectively.  Interest and penalties of approximately $0.53 million and $0.60 million were accrued at June 30, 2011 and December 31, 2010, respectively.

Tax years that remain open and subject to audit include the federal 2007-2010 years and the Indiana 2007-2010 years.  Additionally, during the first quarter of 2011 we reached a state tax settlement for the 2008 year and as a result recorded a reduction of unrecognized tax benefits in the amount of $0.84 million that affected the effective tax rate and increased earnings in the amount of $0.47 million. We do not anticipate a significant change in the amount of uncertain tax positions within the next 12 months.