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Income Taxes
6 Months Ended
Mar. 31, 2012
Income Taxes [Abstract]  
Income Taxes

(6)        Income Taxes

 

                The effective tax rate was 32.2% and 33.2% for the first half of fiscal 2012 and 2011, respectively.  The decline in the effective tax rate was due primarily to cumulative prior year foreign tax credits that were approved during the quarter. 

 

As of March 31, 2012, the Company's U.S. income tax returns for fiscal 2008 and subsequent years remained subject to examination by the Internal Revenue Service ("IRS").  The Company is not currently under any income tax audit by the IRS or any state or local jurisdictions.  State income tax returns generally have statutes of limitations for periods between three and four years from the date of filing.  The Company is currently undergoing an income tax audit in Japan.  The Company does not expect the audit to have a material impact on its consolidated financial statements.  There are no other audits in foreign jurisdictions.  The Company's foreign operations have statutes of limitations on the examination of income tax returns for periods between two and six years.

 

The Company's uncertain tax reserves are reviewed periodically and are adjusted as events occur that affect the estimated liability for additional taxes, such as the lapsing of applicable statutes of limitations, the conclusion of tax audits and the measurement of additional tax.  During the second quarter of fiscal 2012, the Company recorded a $37 tax reserve due to a state income tax notice received by the Company.  The amount of unrecognized tax benefits and the related interest and penalties at March 31, 2012 was $764. The amount of unrecognized tax benefits and the related interest and penalties expected to reverse within the next year is estimated to be approximately $160 to $180.  

 

            On December 23, 2011, the IRS published regulations (in proposed and temporary format) under IRC Section 263(a) on the deduction and capitalization of expenditures related to tangible property, i.e., the "repair regulations."  These regulations are generally effective for taxable years beginning on or after January 1, 2012, or where applicable, to amounts paid or incurred to produce or acquire property in a taxable year beginning on or after such date.  On March 7, 2012, additional Revenue Procedures were released addressing sections of the regulations published in December 2011.  The Company is currently researching its existing policies, along with the IRS Regulations and Revenue Procedures issued, to understand the impact to the Company's income tax liability.  The Company does not expect these regulations and procedures to materially impact its consolidated financial statements.