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Income Taxes
6 Months Ended
Sep. 30, 2016
Income Taxes [Abstract]  
Income Taxes
10. Income Taxes

The Company recorded income tax expense for the three months ended September 30, 2016 of $4,845,000, or an effective tax rate of 34.6%, and an income tax benefit for the three months ended September 30, 2015 of $898,000, or an effective tax rate of 39.2%. The Company recorded income tax expense for the six months ended September 30, 2016 and 2015 of $7,781,000, or an effective tax rate of 31.8%, and $370,000, or an effective tax rate of 41.7%, respectively. The Company’s income tax rates for the three and six months ended September 30, 2016 were positively impacted by $199,000 and $590,000, respectively, of excess tax benefits reflected in income tax expense as a result of the early adoption of the FASB’s new guidance on share-based compensation. The income tax rate for the six months ended September 30, 2016 was further impacted by a non-taxable gain in connection with the fair value adjustment on the warrants compared to a non-deductible loss for the six months ended September 30, 2015. In addition, the income tax rates for all periods are increased by the inclusion of state income taxes and non-deductible executive compensation under Internal Revenue Code Section 162(m). These increases in all periods were partially offset by the benefit of lower statutory tax rates in foreign taxing jurisdictions.
 
The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions with varying statutes of limitations. The Internal Revenue Services (“IRS”) audit for the fiscal years ended March 31, 2011, 2012, 2013, and 2014 were collectively concluded in May 2016.  It was primarily agreed that the Company’s approximately $80,000,000 of ordinary bad debt deduction would be disallowed on its March 31, 2013 return and instead would be reclassified as deductible section165(g)(3) loss on its March 31, 2014 return.  Pursuant to this IRS exam adjustment, and certain other less significant findings, the disallowed losses which were carried back to offset taxable income on the Company’s March 31, 2011 return were reclaimed by the IRS. However the same losses, reclassified as noted above, were carried back two years to offset taxable income on the Company’s March 31, 2012 and 2013 tax returns. The remaining net operating losses were carried forward on to the Company’s March 31, 2014 tax return, and to the extent additional net operating losses remain will also offset taxable income in future years.

The impact of the reclassification and other findings resulted in no material increase in tax expense from changes in taxable income, but the Company incurred additional interest charges of approximately $460,000. These charges were accrued for in the final quarter of the year ended March 31, 2016.  There is no impact from the conclusion of these audits in the income tax expenses for the current period ended September 30, 2016.

The Company is also under examination by the State of California for the years ended March 31, 2013 and 2014. The Company is not under examination in any another jurisdiction. The Company believes no significant changes in the unrecognized tax benefits will occur within the next 12 months.