Quarterly report pursuant to Section 13 or 15(d)

Income Taxes

v2.4.0.6
Income Taxes
 9 Months Ended
Dec. 31, 2011
Income Taxes [Abstract]  
INCOME TAXES

NOTE 14 – INCOME TAXES:

 

The Company files federal and state income tax returns in several domestic and international jurisdictions. In most tax jurisdictions, returns are subject to examination by the relevant tax authorities for a number of years after the returns have been filed. The Company is currently under examination by the U.S. Internal Revenue Service (the “IRS”) for tax years 2009 and 2010. The IRS has completed its examination for tax years 2006 through 2008. In June 2010, the IRS proposed an adjustment, plus interest, to disallow substantially all of the research and development tax credit claimed by the Company in tax years 2006 through 2008. The Company filed a protest to appeal the adjustment in July 2010. In August 2011, the IRS proposed an adjustment, plus interest, to disallow all of the research and development tax credit claimed by the Company in tax years 2009 and 2010. The Company filed a protest to appeal the adjustment. The Company believes its tax position is correct and will continue to take appropriate actions to vigorously defend its position.

 

The cumulative tax benefit related to the research and development tax credit for the tax years ended March 31, 1999 through March 31, 2012 was $2,652. The liability for unrecognized tax benefits related to this tax position was $490 and $477 at December 31 and March 31, 2011, respectively, which represents management’s estimate of the potential resolution of this issue. Any additional impact on the Company’s income tax liability cannot be determined at this time. The tax benefit and liability for unrecognized tax benefits were recorded in the Company’s Consolidated Statement of Operations as follows:

 

                                                         
    Year Ended March 31,        
    2007     2008     2009     2010     2011     2012     Total  

Tax benefit of research and development tax credit

   $ 1,653       218     $ 238     $ 135     $ 204     $ 204     $ 2,652  

Unrecognized tax benefit

     —         —         —         (445 )      (32 )      (13 )      (490 ) 
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net tax benefit of research and development tax credit

   $ 1,653     $ 218     $ 238     $ (310 )    $ 172     $ 191     $ 2,162  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

The Company is subject to examination in state and international tax jurisdictions for tax years 2007 through 2011 and tax years 2008 through 2010, respectively. It is the Company’s policy to recognize any interest related to uncertain tax positions in interest expense and any penalties related to uncertain tax positions in selling, general and administrative expense. The Company had one additional unrecognized tax benefit of $3,561 and $888 as of December 31 and March 31, 2011, respectively. During the three months ended December 31, 2011 and 2010, the Company recorded $21 and $13, respectively, for interest related to its uncertain tax positions. During the nine months ended December 31, 2011 and 2010, the Company recorded $62 and $27, respectively, for interest related to its uncertain tax positions. No penalties related to uncertain tax positions were recorded in the three- or nine-month periods ended December 31, 2011 or 2010.