Taxes on Income (Annual)
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Dec. 31, 2011
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Income Tax Disclosure [Text Block] |
9. Taxes
on Income
The components of income tax
(expense) benefit are as follows:
Loss from continuing
operations before income taxes from the United States
operations is $1.4 million and $6.9 million for the years
ended December 31, 2011 and 2010, respectively. Income
(loss) from continuing operations before income taxes from
Canada operations is $0.2 million and ($0.2) million for the
years ended December 31, 2011 and 2010, respectively.
Income tax benefits for
continuing operations differed from the expected federal
statutory rate of 34.0% as follows:
Deferred income taxes reflect the
net tax effect of temporary differences between the carrying
amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes.
Significant components of the Company’s deferred income
tax assets and liabilities are as follows:
Tax credit carryforwards
primarily relate to federal alternative minimum taxes of $0.9
million paid by the Company, which may be carried forward
indefinitely and applied against regular federal taxes.
Operating tax loss carryforwards primarily relate to U.S.
federal net operating loss carryforwards of approximately
$25.6 million, which begin to expire in 2019. The
Company’s restructuring plan, see Note 2 – Plan
of Restructuring for further details, could result in an
ownership change as defined by section 382 of the Internal
Revenue Code, which establishes an annual limit on the
deductibility of pre-ownership change net operating loss and
credit carryforwards. Management is undergoing a
section 382 evaluation to determine if there has been
ownership change.
A valuation allowance has
been established for the amount of deferred income tax assets
as management has concluded that it is more-likely-than-not
that the benefits from such assets will not be
realized.
The Company’s policy
is to classify interest and penalties related to uncertain
tax positions in income tax expense. The Company does
not have any material uncertain tax positions in 2011 and
2010.
The Company is subject to
U.S. federal income tax as well as income tax in multiple
state and local jurisdictions and Canadian federal and
provincial income tax. Currently, no federal or state
or provincial income tax returns are under examination.
The tax years 2007 through 2010 remain open to examination by
the major taxing jurisdictions and the 2006 tax year remains
open to examination by some state and local taxing
jurisdictions to which the Company is subject.
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