Income Taxes

9 Months Ended

Oct. 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 nine months ended October 31, 2020 and 2019.

The Company’s income tax provision was approximately 26.8% and was a benefit of approximately 65.9% for the three months ended October 31, 2020 and 2019, respectively. The Company’s income tax benefit was approximately 112.7% and approximately 234.7% for the nine months ended October 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 provision for the third quarter of fiscal year 2020 includes approximately $1.8 million related to reversing previously recognized tax benefits associated with the lengthening of a net operating loss carryback allowed by the CARES Act as the Company no longer has a year to date estimated taxable loss.

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):

	Nine Months Ended October 31,
	2020		2019
Unrecognized tax benefits, beginning of period	$	7,370	$	9,232
Changes for prior years’ tax positions		(57)		(77)
Changes for current year tax positions		-		-
Unrecognized tax benefits, end of period	$	7,313	$	9,155