Income Taxes

6 Months Ended

Jul. 31, 2020

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

Note 11. Income Taxes

The Company determined that small changes in estimated “ordinary” income would result in significant changes in the estimated annual effective tax rate. Thus, the Company used a discrete effective tax rate method to calculate the provision or benefit for income taxes for the three and six months ended July 31, 2020 and 2019.

The Company’s income tax benefit was approximately 66.6% and approximately 358.7% for the three months ended July 31, 2020 and 2019, respectively. The Company’s income tax benefit was approximately 47.2% and approximately 687.1% for the six months ended July 31, 2020 and 2019, respectively. The fluctuation in the rate results primarily from the production tax credits the Company expects to receive associated with its refined coal segment relative to consolidated pre-tax income or loss. Through its refined coal operation, the Company earns production tax credits pursuant to IRC Section 45. The credits can be used to reduce future income tax liabilities for up to 20 years. The Company’s income tax benefit for the first six months of fiscal year 2020 includes approximately $1.8 million related to the lengthening of a net operating loss carryback allowed by the recently passed CARES Act.

The Company files a U.S. federal income tax return and various state income tax returns. In general, the Company is no longer subject to U.S. federal, state or local income tax examinations by tax authorities for years ended January 31, 2014 and prior. A reconciliation of the beginning and ending amount of unrecognized tax benefits, including interest and penalties, is as follows (amounts in thousands):

	Six Months Ended July 31,
	2020			2019
Unrecognized tax benefits, beginning of period	$	7,370		$	9,232
Changes for prior years’ tax positions		(53	)		102
Changes for current year tax positions		-			-
Unrecognized tax benefits, end of period	$	7,317		$	9,334