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Income Taxes | 9 Months Ended
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Jun. 30, 2021
Income Tax Disclosure [Abstract] |
Income Taxes |
6. | Income Taxes
Under Internal Revenue Service (IRS) procedures, a taxpayer can change tax accounting methods, but they are generally required to maintain the new tax accounting method for five years. In 2019, acknowledging that taxpayers may require multiple tax accounting method changes associated with the implementation of the Tax Cuts and Jobs Act of 2017, the IRS waived the five-year “eligibility rule” for certain tax accounting method changes for the first three years ending on or after November 20, 2018. Citing a need to help companies impacted by the COIVD-19 pandemic, the Coronavirus Aid, Relief, and Economic Security Act allows a taxpayer to carryback net operating losses generated in years beginning after December 31, 2017 and before January 1, 2021 for five years. In the third quarter of fiscal 2021, the Company implemented a plan to make certain tax accounting method changes and change the timing of certain deductible payments, which the Company expects to generate a fiscal 2021 net operating loss of approximately $725 million. The Company is able to carryback the net operating loss to prior tax years with higher federal statutory tax rates. The Company’s effective tax rate for the third quarter of fiscal 2021 reflects a discrete tax benefit of $69.9 million related to the implementation of this plan. The Company recorded an income tax benefit of $21.9 million for the three months ended June 30, 2021 on pre-tax income of $192.5 million, compared to an expense of $28.0 million, or 25.8% of pre-tax income, for the three months ended June 30, 2020. Results for the three months ended June 30, 2021 were impacted by the $69.9 million discrete tax benefit. For the three months ended June 30, 2020, a discrete benefit related to the fiscal 2019 federal provision-to-return adjustment of $2.0 million was largely offset by discrete charges related to changes in uncertain tax position reserves. The Company recorded income tax expense of $24.5 million for the nine months ended June 30, 2021, or 6.0% of pre-tax income, compared to $87.0 million, or 27.8% of pre-tax income, for the nine months ended June 30, 2020. Results for the nine months ended June 30, 2021 wer e favorably impacted by the $69.9 million discrete tax benefit. Results for the nine months ended June 30, 2020 were unfavorably impacted by $10.1 million of net discrete tax charges, including a $11.4 million charge related to a valuation allowance recorded against certain foreign net deferred tax assets in Europe, a $2.6 million benefit related to employee stock-based compensation payments, a $2.0 million benefit related to the fiscal 2019 federal provision-to-return adjustment and $1.9 million of charges related to changes in uncertain tax position reserves. Certain tax positions taken in the third quarter of fiscal 2021 are highly complex and subject to judgmental estimates. The Company recorded a liability for unrecognized tax benefits of $16.6 million in the third quarter of fiscal 2021 reflecting the uncertainty of those tax positions. The Company’s liability for gross unrecognized tax benefits, excluding related interest and penalties, was $49.9 million and $79.8 million as of June 30, 2021 and September 30, 2020, respectively. As of June 30, 2021, net unrecognized tax benefits, excluding interest and penalties, of $25.9 million would affect the Company’s net income if recognized. The Company recognizes accrued interest and penalties, if any, related to unrecognized tax benefits in the “Provision for income taxes” in the Condensed Consolidated Statements of Income. During the nine months ended June 30, 2021 and 2020, the Company recognized expense of $1.4 million and $1.0 million, respectively, related to interest and penalties. At June 30, 2021, the Company had accruals for the payment of interest and penalties of $7.1 million. During the next twelve months, it is reasonably possible that federal, state and foreign tax audit resolutions could reduce net unrecognized tax benefits by approximately $9.6 million because the Company’s tax positions are sustained on audit, the Company agrees to their disallowance or the statutes of limitations close.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI http://asc.fasb.org/extlink&oid=116825942&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI http://asc.fasb.org/extlink&oid=116825942&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 + Details
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