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NOTE 13 - FEDERAL INCOME TAXES
 12 Months Ended
Dec. 31, 2011
Income Tax Disclosure [Text Block]
NOTE 13 - FEDERAL INCOME TAXES

 The components of the provision (benefit) for income taxes attributable to continuing operations are as follows:

 
For The Year Ended
 
For the Year Ended
 
 
December 31,
 
December 31,
 
   
2011
   
2010
 
Current:
           
Federal
 
$
-
   
$
(50
)
State
   
1
     
(1
) 
Foreign
   
43
     
43
 
Total current
   
44
     
(8
) 
                 
Deferred:
               
Federal
   
25
     
--
 
State
   
3
     
--
 
Foreign
   
-
     
--
 
Total deferred
   
28
     
--
 
                 
   
$
72
     
(8
) 

 Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company's deferred taxes at December 31, 2011 and 2010 are as follows:

   
2011
   
2010
 
DEFERRED TAX ASSETS:
           
Current deferred tax assets
           
    Deferred revenue
 
$
454
   
$
257
 
    Accrued expenses
   
91
     
52
 
    Other
   
7
     
17
 
     
552
     
326
 
    Valuation allowance
   
(543
) 
   
(320
)
  Net current deferred tax assets
   
9
     
6
 
                 
  Noncurrent deferred tax assets
               
    Net operating losses
   
40,718
     
52,047
 
 Research and development credit carryforwards
   
3,875
     
3,818
 
 Minimum tax credit carryforwards
   
161
     
161
 
    Fixed assets
   
367
     
1,060
 
                 
    Stock compensation
   
65
     
56
 
 Other
   
-
     
20
 
     
45,186
     
57,162
 
    Valuation allowance
   
(44,449
) 
   
(56,116
)
   Net noncurrent deferred tax assets
   
737
     
1,046
 
                 
Noncurrent deferred tax liabilities
               
    Acquired intangibles
   
(746
)
   
(1,052
)
    Goodwill
   
(28
) 
       
                 
Total noncurrent deferred tax liabilities
   
(774
)
   
(1,052
)
                 
  Net current deferred tax asset
   
9
     
6
 
  Net noncurrent deferred tax iability
 
$
(37
) 
 
$
(6
)

At December 31, 2011, the Company had federal net operating loss carryforwards of approximately $119,295 research and development credit carryforwards of approximately $4,698 and alternative minimum tax credit carryforwards of approximately $161. The net operating loss and research and development credit carryforwards will expire in varying amounts from 2012 through 2032, if not utilized. Minimum tax credit carryforwards carry forward indefinitely.

 As a result of various acquisitions by the Company in prior years, utilization of the net operating losses and credit carryforwards may be subject to a substantial annual limitation due to the "change in ownership" provisions of the Internal Revenue Code of 1986. The annual limitation may result in the expiration of net operating losses before utilization.

Due to the uncertainty surrounding the timing of realizing the benefits of its favorable tax attributes in future tax returns, the Company has placed a valuation allowance against its net deferred tax asset, exclusive of goodwill. During the year ended December 31, 2011, the valuation allowance decreased by approximately $11,445 due primarily to operations, including expiration of tax carryforwards.  Approximately $8,251 of the valuation allowance relates to tax benefits for stock option deductions included in the net operating loss carryforward which, when realized, will be allocated directly to contributed capital to the extent the benefits exceed amounts attributable  to book deferred compensation expense.

Undistributed earnings of the Company’s foreign subsidiaries are considered permanently reinvested and, accordingly, no provision for U.S. federal or state income taxes has been provided thereon.

 The Company’s provision (benefit) for income taxes attributable to continuing operations differs from the expected tax expense (benefit) amount computed by applying the statutory federal income tax rate of 34% to income before income taxes as a result of the following:

 
For the Year Ended
December 31, 2011
   
For the Year Ended
December 31, 2010
 
             
Computed at statutory rate
 
$
(196
) 
 
$
(389
)
State taxes, net of federal benefit
   
3
     
(40
)
Permanent items and other
   
26
     
38
 
Change in applicable state rate
   
-
     
-
 
Carryforwards/carrybacks utilized
   
-
     
(50
)
Foreign income taxed at different rates
      -      
(4
) 
Tax carryforwards not benefitted
   
239
     
437
 
   
$
72
   
$
(8
) 

Effective August 1, 2007, the Company adopted ASC 740-10 regarding uncertain tax positions.  The Company did not record any additional tax liability as a result of the adoption of ASC 740-10 and no adjustment was required to the August 1, 2007 balance of retained earnings. The total amount of unrecognized tax benefits as of January 1, 2011 was approximately $998. The reconciliation of the Company’s unrecognized tax benefits at the beginning and end of the year is as follows:

Balance at January 1, 2011
 
$
998
 
Additions based on tax positions related to the current year
   
26
 
Additions for tax positions of prior years                                                                                             
   
27
 
Balance at December 31, 2011                                                                                            
 
$
1,051
 

As of December 31, 2011 the Company had $1,051 of unrecognized tax benefits, which would affect the effective tax rate if recognized.  The Company’s assessment of the unrecognized tax benefits is subject to change as a function of income tax audits by the taxing authorities.

The Company’s practice is to recognize interest and/or penalties related to income tax matters in income tax expense.  During the twelve months ended December 31, 2011, the Company recognized $3 of interest and penalties in its income tax expense. 

Asure Software files tax returns in the U.S. federal jurisdiction and in several state and foreign jurisdictions.  The Company is no longer subject to U.S. federal income tax examinations for years ending before July 31, 2008 and is no longer subject to state and local or foreign income tax examinations by tax authorities for years ending before July 31, 2007.  Asure Software is not currently under audit for federal, state or any foreign jurisdictions.