XML 87 R16.htm IDEA: XBRL DOCUMENT
v2.4.0.8

Income Taxes | 12 Months Ended
--- | ---
Sep. 30, 2013
Income Taxes [Abstract] |
Income Taxes | 10. INCOME TAXES Federal and state income tax provisions for continuing operations are as follows:
|  |  | Years Ended September 30,
|  |  | 2013 |  | 2012 |  | 2011
Federal: |  |  |  |  |  |  |  |  |
| Current |  | $ | - |  | $ | - |  | $ | -
| Deferred |  |  | - |  |  | - |  |  | -
State: |  |  |  |  |  |  |  |  |
| Current |  |  | 363 |  |  | 253 |  |  | 250
| Deferred |  |  | (37) |  |  | (215) |  |  | (78)
|  |  | $ | 326 |  | $ | 38 |  | $ | 172
Actual income tax expense differs from income tax expense computed by applying the U.S. federal statutory corporate rate of 35 percent to income before provision for income taxes as follows:
|  |  | Years Ended September 30,
|  |  | 2013 |  | 2012 |  | 2011
Provision (benefit) at the statutory rate |  | $ | (648) |  | $ | (918) |  | $ | (6,786)
Increase resulting from: |  |  |  |  |  |  |  |  |
| Non-deductible expenses |  |  | 1,269 |  |  | 490 |  |  | 548
| State income taxes, net of federal deduction |  |  | 377 |  |  | 106 |  |  | -
| Change in valuation allowance |  |  | - |  |  | 581 |  |  | 7,066
| Other |  |  | 29 |  |  | - |  |  | 16
Decrease resulting from: |  |  |  |  |  |  |  |  |
| Change in valuation allowance |  |  | (651) |  |  | - |  |  | -
| State income taxes, net of federal deduction |  |  | - |  |  | - |  |  | (600)
| Contingent tax liabilities |  |  | (50) |  |  | (206) |  |  | (72)
| Other |  |  | - |  |  | (15) |  |  | -
|  |  | $ | 326 |  | $ | 38 |  | $ | 172
Deferred income tax provisions result from temporary differences in the recognition of income and expenses for financial reporting purposes and for income tax purposes. The income tax effects of these temporary differences, representing deferred income tax assets and liabilities, result principally from the following:
|  |  |  | Years Ended September 30,
|  |  |  | 2013 |  | 2012
Deferred income tax assets: |  |  |  |  |  |
| Allowance for doubtful accounts |  | $ | 370 |  | $ | 675
| Accrued expenses |  |  | 7,023 |  |  | 6,254
| Net operating loss carryforward |  |  | 110,259 |  |  | 106,004
| Various reserves |  |  | 1,022 |  |  | 1,085
| Equity losses in affiliate |  |  | 235 |  |  | 292
| Share-based compensation |  |  | 2,732 |  |  | 2,757
| Capital loss carryforward |  |  | 4,100 |  |  | 3,909
| Property |  |  | - |  |  | 397
| Other |  |  | 2,334 |  |  | 1,651
Subtotal |  |  | 128,075 |  |  | 123,024
Less valuation allowance |  |  | (126,500) |  |  | (121,962)
Total deferred income tax assets |  | $ | 1,575 |  | $ | 1,062
Deferred income tax liabilities: |  |  |  |  |  |
| Property and equipment |  | $ | (570) |  | $ | -
| Deferred contract revenue and other |  |  | (123) |  |  | (196)
Total deferred income tax liabilities |  |  | (693) |  |  | (196)
Net deferred income tax assets |  | $ | 882 |  | $ | 866
In 2002, we adopted a tax accounting method change that allowed us to deduct goodwill for income tax purposes that had previously been classified as non-deductible. The accounting method change resulted in additional amortizable tax basis in goodwill. We believe the realization of the additional tax basis in goodwill is less than probable and have not recorded a deferred tax asset. Although a deferred tax asset has not been recorded through September 30, 2013, we have derived a cumulative cash tax reduction o f $11,4 4 8 from the change in tax accounting method and the subsequent amortization of the additional tax goodwill. In addition, the amortization of the additional tax goodwill has resulted in additional federal net operating loss carry forwards of $140,8 35 and state net operating loss carry forwards of $1 4,564. We believe the realization of the additional net operating loss carry forwards is not more likely than not and have not recorded a deferred tax asset. We have $993 of tax basis in the additional tax goodwill that remains to be amortized. As of September 30, 2013, approximately t wo years remain to be amortized. As of September 30, 2013, we had available approximately $4 65,577 of federal net t ax operating loss carry forward for federal income tax purposes, i ncluding $140,835 resulting from the additional amortization of tax goodwill. This carry forward, which may provide future tax benefits, will begin to expire in 20 22. On May 12, 2006, we had a change in ownership as defined in Internal Revenue Code Section 382. As such, our utilization after the change date of our net operating loss in existence as of the change of control date was subject to Section 382 limitations for federal income taxes and some state income taxes. The annual limitation under Section 38 2 on the utilization of federal net operating losses was approximately $20,000 for the first five tax years subsequent to the change in ownership and $16,000 thereafter. Approximately $284,616 of federal net operating losses will not be subject to this lim itation. Also, after applying the Section 382 limitation to available state net operating loss carry forwards, we had available approximately $1 45,527 state net tax operating loss carry forwards, including $1 4,564 resulting from the additional amortization of tax goodwill which begin s to expire as of September 30, 2014. We have provided valuation allowances on all net operating losses where it is determined it is more likely than not that they wi ll expire without being utilized. In assessing the realizability of deferred tax assets at September 30, 2013, we considered whether it was more likely than not that some portion or all of the deferred tax assets will not be realized. Our realization of def erred tax assets is dependent upon the generation of future taxable income during the periods in which these temporary differences become deductible. However, GAAP guidelines place considerably more weight on historical results and less weight on future pr ojections when there is negative evidence such as cumulative pretax losses in recent years. We incurred a cumulative pretax loss for the years ended September 30, 2013, 2012 and 2011. In the absence of specific favorable evidence of sufficient weight to offset the negative evidence of the cumulative pretax loss, we have provided valuation allowances of $121,095 for all federal deferred tax assets and $5,405 for certain state deferred tax assets. We believe that $1,075 of federal deferred tax assets will be realized by offsetting reversing deferred tax liabilities. We believe that $88 2 of state deferred tax assets will be realized and valuation allowances were not provided for these assets. We will evaluate the ap propriateness of our remaining deferred tax assets and valuation allowances on at least annually at the end of each fiscal year. As a result of the reorganization and related adjustment to the book basis in goodwill, we have tax basis in excess of book b asis in amortizable goodwill of approximately $23,902. The tax basis in amortizable goodwill in excess of book basis is not reflected as a deferred tax asset. To the extent the amortization of the excess tax basis results in a cash tax benefit, the benefit will first go to reduce goodwill, then other long-te rm intangible assets, and then additional paid-in capital. As of September 30, 2013, we have received $72 in cash tax benefits related to the amortization of excess tax basis. GAAP requires financial statement reporting of the expected future tax consequenc es of uncertain tax return reporting positions on the presumption that all relevant tax authorities possess full knowledge of those tax reporting positions, as well as all of the pertinent facts and circumstances, but it prohibits discounting of any of the related tax effects for the time value of money. The evaluation of a tax position is a two-step process. The first step is the recognition process to determine if it is more likely than not that a tax position will be sustained upon examination by the ap propriate taxing authority, based on the technical merits of the position. The second step is a measurement process whereby a tax position that meets the more likely than not recognition threshold is calculated to determine the amount of benefit/expense to recognize in the financial statements. The tax position is measured at the largest amount of benefit/expense that is more likely than not of being realized upon ultimate settlement. A reconciliation of the beginning and ending balances of unrecognized t ax liabilities is as follows:
Balance at October 1, 2012 | $ | 5,343
Additions for position related to current year |  | 13
Additions for positions of prior years |  | 8
Reduction resulting from the lapse of the applicable statutes of limitations |  | (63)
Reduction resulting from settlement of positions of prior years |  | -
Balance at September 30, 2013 | $ | 5,301
As of September 30, 2013, $5,3 01 of unrecognized tax benefit s would result in a decrease in the provision for income tax expense. We anticipate that approximately $3 of unrecognized tax benefits, including accrued interest, may reverse in the next twelve months. The reversal is predominately due to the expiration of the statutes of limitatio n for unrecognized tax benefits. We had approximately $6 and $15 accrued for the payment of interest and penalties at September 30, 2013 and 2012, res pect ively. We recognize interest and penalties related to unrecognized tax benefits as part of the provision for income taxes. We are currently not under federal audit by the Internal Revenue Service. The t ax years ended September 30, 2010 and forward are su bject to audit as are tax years prior to September 30, 2010, to the extent of unutilized net operating losses generated in those years. The net deferred income tax assets and liabilities are comprised of the following:
|  |  |  | Years Ended September 30,
|  |  |  | 2013 |  | 2012
| Current deferred income taxes: |  |  |  |  |  |
|  | Assets |  | $ | 442 |  | $ | 283
|  | Liabilities |  |  | (286) |  |  | (197)
| Net deferred tax asset, current |  | $ | 156 |  | $ | 86
| Noncurrent deferred income taxes: |  |  |  |  |  |
|  | Assets |  | $ | 1,631 |  | $ | 1,065
|  | Liabilities |  |  | (905) |  |  | (285)
| Net deferred tax asset, non-current |  |  | 726 |  |  | 780
Net deferred income tax assets |  | $ | 882 |  | $ | 866

X
- Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration