Invacare 2009 Annual Report Download - page 99

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INVACARE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Income Taxes—Continued
2012 and $366,700,000 of domestic state and local tax loss carryforwards, of which $207,200,000 expire
between 2010 and 2013, $79,100,000 expire between 2014 and 2023 and $80,400,000 expire after 2023. The
company has domestic federal tax credit carryforwards of $30,490,000 of which $10,870,000 expire between
2014 and 2018 and $19,070,000 expire between 2019 and 2029 and $550,000 is indefinite.
The company adopted the provisions of FIN 48 on January 1, 2007. As of December 31, 2009 and 2008, the
company had a liability for uncertain tax positions, excluding interest and penalties of $5,770,000 and
$6,400,000, respectively. The company does not believe there will be a material change in its unrecognized tax
positions over the next twelve months.
The total liabilities associated with unrecognized tax benefits that, if recognized, would impact the effective
tax rates were $5,770,000 and $6,400,000 at December 31, 2009 and 2008, respectively.
A reconciliation of the beginning and ending balance of unrecognized tax benefits is as follows (in
thousands):
2009 2008
Balance at beginning of year ................................................... $6,400 $ 8,085
Additions to:
Positions taken during the current year ....................................... 1,130 360
Positions taken during a prior year ........................................... 2,340 40
Deductions due to:
Exchange rate impact ..................................................... 280 (260)
Positions taken during the current year ....................................... — (10)
Positions taken during a prior year ........................................... (95) (85)
Settlements with taxing authorities .......................................... (2,365) (1,370)
Lapse of statute of limitations .............................................. (980) (360)
Balance at end of year ........................................................ $6,710 $ 6,400
The company recognizes interest and penalties associated with uncertain tax positions in income tax
expense. During 2009, 2008 and 2007 the (benefit) provision for interest and penalties was $(490,000),
$(155,000) and $840,000, respectively. The Company had approximately $2,035,000 and $2,625,000 of accrued
interest and penalties as of December 31, 2009 and 2008, respectively.
The company and its subsidiaries file income tax returns in the U.S. and certain foreign jurisdictions. The
company is subject to U.S. federal income tax examinations for calendar year 2008 and 2009, and is subject to
various U.S. state income tax examinations for 2004 to 2009. With regards to foreign income tax jurisdictions,
the company is generally subject to examinations for the periods 2004 to 2009.
FS-31