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Income Taxes | 9 Months Ended
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Jun. 30, 2014
Income Tax Disclosure [Abstract] |
INCOME TAXES | INCOME TAXES Income tax benefit was $0.2 million and $1.5 million for the three and nine months ended June 30, 2014, respectively. Tax benefits specific to the three months ended June 30, 2014 primarily include $0.3 million related to a valuation allowance reversal associated with the reassessment of state research and development tax credits. Tax benefits specific to the nine months ended June 30, 2014 primarily include $0.3 million related to a valuation allowance reversal associated with the reassessment of state research and development tax credits, $1.1 million related to the re-measurement and reversal of certain income tax reserves as a result of a federal income tax audit for fiscal 2012, and $0.2 million for the release of income tax reserves due to the expiration of statutes of limitation from U.S. and foreign tax jurisdictions. For both the three and nine month periods ended June 30, 2014, our effective tax rates before items specific to the period were greater than the statutory rate due primarily to U.S. tax implications of our non-U.S. operations and lower than expected benefits associated with certain state credits. For the three months ended June 30, 2013, we recorded tax benefits specific to the period of $0.1 million for the release of income tax reserves due to the expirations of the statutes of limitation for U.S. Federal income tax for fiscal 2009. In addition, we recorded adjustments of estimates in connection with the filing of tax returns for the U.S. and a foreign tax jurisdiction. For the nine months ended June 30, 2013, we recorded tax benefits specific to the period of $0.6 million, which consisted of the items mentioned above for the three months ended June 30, 2013, $0.4 million relating to the January 2, 2013 enactment of the American Taxpayers Relief Act of 2012 extending the research and development tax credit for the last three quarters of fiscal 2012 and $0.1 million for the release of income tax reserves due to the expiration of statutes of limitation from U.S. and foreign tax jurisdictions. 9. INCOME TAXES (CONTINUED) Our effective tax rate will vary based on a variety of factors, including overall profitability, the geographical mix of income before taxes and related statutory tax rate in each jurisdiction, and tax benefits specific to the period, such as settlements of audits. We expect that we may record other benefits or expenses in the future that are specific to a particular quarter, based on expiration of statutes of limitation, the completion of tax audits, or legislation that is enacted for both U.S. and foreign jurisdictions. A reconciliation of the beginning and ending amount of unrecognized tax benefits is (in thousands):
Unrecognized tax benefits as of September 30, 2013 | $ | 3,332 |
Decreases related to: |
Prior year income tax positions | (1,077 | )
Settlements | (94 | )
Expiration of statute of limitations | (160 | )
Unrecognized tax benefits as of June 30, 2014 | $ | 2,001 |
The total amount of unrecognized tax benefits that, if recognized, would affect our effective tax rate is $2.0 million. We expect an insignificant change in the total amounts of unrecognized tax benefits over the next 12 months. We recognize interest and penalties related to income tax matters in income tax expense. During both the nine month periods ended June 30, 2014 and 2013, there were insignificant amounts of interest and penalties related to income tax matters in income tax expense. Accrued interest and penalties related to unrecognized tax benefits were $0.4 million at June 30, 2014 and $0.6 million at September 30, 2013. Our long-term income taxes payable on our condensed consolidated balance sheets includes these accrued interest and penalties in addition to the unrecognized tax benefits in the above table. At June 30, 2014, we had approximately $27.2 million of accumulated undistributed foreign earnings, for which we have not accrued additional U.S. tax. Our policy is to reinvest earnings of our foreign subsidiaries indefinitely to fund current operations and provide for future international expansion opportunities, and only to repatriate earnings to the extent that U.S. taxes have already been recorded. Although we have no current need to do so, if we change our assertion that we do not intend to repatriate additional undistributed foreign earnings for cash requirements in the United States, we would have to accrue applicable taxes. The amount of any taxes and the application of any tax credits would be determined based on the income tax laws at the time of such repatriation. Under current tax laws, we estimate the unrecognized deferred tax liability to be in the range of $1.8 million to $2.8 million. This amount could have a material impact on our current consolidated balance sheets, results of operations and cash flows. We operate in multiple tax jurisdictions, including the U.S. and other jurisdictions outside of the U.S. Accordingly, we must determine the appropriate allocation of income to each of these jurisdictions. This determination requires us to make several estimates and assumptions. Tax audits associated with the allocation of this income, and other complex issues, may require an extended period of time to resolve and may result in adjustments to our income tax balances in those years that are material to our consolidated balance sheet and results of operations. We are no longer subject to income tax examination for tax years prior to fiscal 2009, except for certain refund claims applicable to fiscal 2009, in the case of U.S. federal tax authorities and prior to fiscal 2008 for non-U.S. income tax authorities. We were subject to a U.S. federal income tax audit for fiscal 2012 that was settled during the second quarter of fiscal 2014. For state taxing authorities, most notably in Minnesota, California and Texas, we are no longer subject to income tax examination for tax years generally before fiscal 2009. During the third quarter of fiscal 2014, we discovered that we had not appropriately disclosed the deferred tax assets and related valuation allowances for the state research and development tax credit carryforwards in our tax footnote for previously issued filings. We will correct these disclosures for all periods presented in the tax footnote in our September 30, 2014 financial statements that will be included in our fiscal 2014 Form 10-K. Tax carryforwards were understated by $0.6 million and valuation allowances were understated by $0.3 million as of September 30, 2013 (see Footnote 2 to our Condensed Consolidated Financial Statements).

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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/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
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