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This excerpt taken from the AKS 10-Q filed May 5, 2008.
Income taxes recorded through March 31, 2008 have been estimated based on year-to-date income and projected results for the full year. The amounts recorded reflect the provisions of FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes” which clarifies the accounting for uncertainty in income taxes recognized in an entity’s financial statements and prescribes standards for the recognition and measurement of tax positions taken or expected to be taken on a tax return.
The balance of unrecognized tax benefits at December 31, 2007 was $50.9. For the three-month period ending March 31, 2008, the unrecognized tax benefits related to tax positions taken in prior periods increased by $15.6. This increase included $14.7 related to accrued liabilities the Company has determined may not be deductible for tax purposes until paid and $0.9 related to the impact of federal audit adjustments on state and local taxes. The portion of the increase in unrecognized tax benefits that will affect the effective tax rate is $0.2. For 2008, it is estimated the Company will record an additional $0.4 of unrecognized tax benefits related to tax positions likely to be taken on tax returns to be filed for the current year with no affect on the effective tax rate.
The Company recognizes interest and penalties accrued related to uncertain tax positions as a component of income tax expense. Accrued interest and penalties are included in the related tax liability line in the consolidated balance sheet. The balance of interest and penalties at December 31, 2007 was $4.9. For the period ended March 31, 2008, the Company recognized approximately $1.1 in interest and penalties.
Certain tax positions exist for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change within twelve months of March 31, 2008. The Company has filed an appeal with taxing authorities to resolve a state tax issue related to the Company’s filing position for tax years prior to 2002. The resolution of this issue, if concluded in the Company’s favor, is estimated to reduce related unrecognized tax benefits within the next twelve months by approximately $0.3 to $0.9.
The Company is subject to taxation by the United States and by various state and foreign jurisdictions. The Company’s tax years for 2005 and forward are subject to examination by the tax authorities. Net operating losses carried forward from prior years are subject to examination by tax authorities. However, with a few exceptions, the Company is no longer subject to federal, state, local or foreign examinations by tax authorities for years before 2005.
These excerpts taken from the AKS 10-K filed Feb 26, 2008.
In 2007, the Company had an income tax provision of $203.6 which included a benefit of $11.4 due to state tax law changes, compared to an income tax benefit of $15.1 in 2006, which included a provision of $5.7 due to state tax law changes.
The Companys net