ADP 2010 Annual Report Download - page 82

A reconciliation of the beginning and ending amounts of unrecognized tax benefits is as follows:
Interest expense and penalties associated with uncertain tax positions have been recorded in the provision for income taxes on the
Statements of Consolidated Earnings. During the fiscal years ended June 30, 2010, 2009 and 2008, the Company recorded interest
expense of $4.0 million, $15.5 million and $18.4 million, respectively. At June 30, 2010, the Company had accrued interest of $15.3
million recorded on the Consolidated Balance Sheets, of which $0.2 million was recorded within income taxes payable, and the
remainder was recorded within other liabilities. At June 30, 2009, the Company had accrued interest of $29.4 million recorded on the
Consolidated Balance Sheets, all of which was recorded within other liabilities. At June 30, 2010, the Company had accrued penalties
of $1.1 million recorded on the Consolidated Balance Sheets, all of which was recorded within other liabilities. At June 30, 2009, the
Company had accrued penalties of $0.5 million recorded on the Consolidated Balance Sheets, all of which was recorded within other
liabilities.
The Company is routinely examined by the IRS and tax authorities in foreign countries in which it conducts business, as well as tax
authorities in states in which it has significant business operations, such as California, Illinois, Minnesota and New Jersey. The tax
years currently under examination vary by jurisdiction. Such examinations currently in progress are as follows:
Unrecognized tax benefits at July 1, 2007
$
350.2
Additions for tax positions of the fiscal year ended June 30, 2008
23.6
Reductions for tax positions of the fiscal year ended June 30, 2008
-
Additions for tax positions of periods prior to the fiscal year ended June 30, 2008
43.2
Reductions for tax positions of periods prior to the fiscal year ended June 30, 2008
(11.5
)
Settlements with tax authorities
(1.1
)
Expiration of the statute of limitations
(4.0
)
Impact of foreign exchange rate fluctuations
3.8
Unrecognized tax benefits at June 30, 2008
$
404.2
Unrecognized tax benefits at July 1, 2008
$
404.2
Additions for tax positions of the fiscal year ended June 30, 2009
19.0
Reductions for tax positions of the fiscal year ended June 30, 2009
(6.4
)
Additions for tax positions of periods prior to the fiscal year ended June 30, 2009
111.4
Reductions for tax positions of periods prior to the fiscal year ended June 30, 2009
(207.7
)
Settlements with tax authorities
(216.9
)
Expiration of the statute of limitations
(3.5
)
Impact of foreign exchange rate fluctuations
(7.3
)
Unrecognized tax benefits at June 30, 2009
$
92.8
Unrecognized tax benefits at July 1, 2009
$
92.8
Additions for tax positions of the fiscal year ended June 30, 2010
13.3
Reductions for tax positions of the fiscal year ended June 30, 2010
(2.1
)
Additions for tax positions of periods prior to the fiscal year ended June 30, 2010
29.6
Reductions for tax positions of periods prior to the fiscal year ended June 30, 2010
(1.0
)
Settlements with tax authorities
(5.0
)
Expiration of the statute of limitations
(20.3
)
Impact of foreign exchange rate fluctuations
(0.1
)
Unrecognized tax benefits at June 30, 2010
$
107.2
Taxing Jurisdiction
Fiscal Years under Examination
U.S. (IRS)
2009 – 2010
California
2004 - 2005
Illinois
2004 - 2005
Minnesota
1998 - 2004