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NOTE 12 - INCOME TAXES | 12 Months Ended
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Dec. 31, 2015
Income Tax Disclosure [Abstract] |
NOTE 12 - INCOME TAXES | Components of income (loss) before taxes:
Components of income (loss) before taxes: |  |  |  |
|  | Year Ended December 31,
(in thousands) |  | 2015 |  | 2014
U.S. operations |  | $ | 420 |  |  | $ | 1,011 |
Foreign operations |  |  | 502 |  |  |  | 95 |
Total income (loss) before taxes |  | $ | 922 |  |  | $ | 1,106 |
Income tax expense (benefit) consists of:
(in thousands) |  | Year Ended December 31,
Current tax expense (benefit) |  | 2015 |  | 2014
U.S. federal |  | $ | 0 |  |  | $ | 0 |
State |  |  | (1 | ) |  |  | (4 | )
Foreign |  |  | (4 | ) |  |  | 11 |
|  |  | (5 | ) |  |  | 7 |
Deferred tax expense (benefit) – U.S. federal |  |  | — |  |  |  | — |
Total income tax expense (benefit) |  | ($ | 5 | ) |  | $ | 7 |
A reconciliation of our effective income tax and the U.S. federal tax rate is as follows:
|  | Year Ended December 31,
|  | 2015 |  | 2014
(in thousands) |  |  |  |
Statutory tax |  | $ | 313 |  |  | $ | 376 |
State and foreign income tax, net of |  |  |  |  |  |  |  |
federal income tax benefit |  |  | (105 | ) |  |  | (80 | )
Valuation allowance for deferred tax assets |  |  | (213 | ) |  |  | (289 | )
Total income tax expense (benefit) |  | ($ | 5 | ) |  | $ | 7 |
The tax effects of temporary differences that gave rise to significant portions of the deferred tax assets are presented below:
|  | Year Ended December 31,
|  | 2015 |  | 2014
(in thousands) |  |  |  |
Deferred income tax assets: |  |  |  |  |  |  |  |
Allowance for doubtful accounts |  | $ | 11 |  |  | $ | 25 |
Inventory and product return reserves |  |  | 723 |  |  |  | 739 |
Compensation accruals |  |  | 1,533 |  |  |  | 1,392 |
Accrued liabilities |  |  | 311 |  |  |  | 106 |
Book-over-tax depreciation and amortization |  |  | 99 |  |  |  | 1,018 |
Foreign net operating loss carryforwards |  |  | 809 |  |  |  | 970 |
U.S. net operating loss carryforwards |  |  | 6,919 |  |  |  | 6,340 |
U.S. credit carryforwards |  |  | 1,264 |  |  |  | 1,212 |
|  |  | 11,669 |  |  |  | 11,802 |
Valuation Allowance |  |  | (11,669 | ) |  |  | (11,802 | )
Total Deferred Income Tax Assets |  | $ | — |  |  | $ | — |
The valuation allowance for deferred tax assets decreased $133,000 during the year ended December 31, 2015, and decreased $239,000 during the year ended December 31, 2014. The net deferred tax assets have a full valuation allowance provided due to uncertainty regarding our ability to utilize such assets in future years. This full valuation allowance evaluation is based upon our volatile history of losses and the cyclical nature of our industry and capital spending. Credit carryforwards consist primarily of research and experimental and alternative minimum tax credits with expiration years from 2020 to 2035. U.S. net operating loss carryforwards are $20,349,000 at December 31, 2015 with expiration years from 2020 to 2035. Utilization of net operating loss and credit carryforwards is subject to certain limitations under Section 382 of the Internal Revenue Code of 1986, as amended. The gross changes in uncertain tax positions resulting in unrecognized tax benefits are presented below:
|  | Year Ended December 31,
|  | 2015 |  | 2014
(in thousands) |  |  |  |
Unrecognized tax benefits, opening balance |  | $ | 197 |  |  | $ | 180 |
Prior period tax position increases |  |  | (3 | ) |  |  | — |
Additions based on tax positions related to current year |  |  | 16 |  |  |  | 17 |
Unrecognized tax benefits, ending balance |  | $ | 210 |  |  | $ | 197 |
Historically, we have not incurred any interest or penalties associated with tax matters and no interest or penalties were recognized during 2015. However, we have adopted a policy whereby amounts related to penalties associated with tax matters are classified as general and administrative expense when incurred and amounts related to interest associated with tax matters are classified as interest income or interest expense. Tax years that remain open for examination include 2012, 2013, 2014 and 2015 in the United States of America. In addition, tax years from 2000 to 2011 may be subject to examination in the event that we utilize the net operating losses and credit carryforwards from those years in our current or future year tax returns.

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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 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 2: 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 Reference 3: 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 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 + Details
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