Quarterly report pursuant to sections 13 or 15(d)

Income taxes

v2.4.0.6
Income taxes
 3 Months Ended
Dec. 31, 2012
Income taxes [Abstract]  
Income taxes

Note 5. Income taxes

Alico's effective tax rate was 38.0% and 38.9% for the three months ended December 31, 2012 and 2011, respectively.

The Company applies a "more likely than not" threshold to the recognition and non-recognition of tax positions. A change in judgment related to prior years' tax positions is recognized in the quarter of such change. The Company had no reserve for uncertain tax positions at December 31, 2012 and September 30, 2012. The Company recognizes interest and/or penalties related to income tax matters in income tax expense and in the liability accrued taxes.

 

The IRS examined the returns of Alico, Agri-Insurance, Ltd. and Alico-Agri for the tax years 2005 through 2007. The IRS findings were appealed and a settlement was reached on May 16, 2012. Federal taxes and interest paid as a result of the settlement were $613,000 and $225,000, respectively. On October 9, 2012, the Company paid the State of Florida $318,000 for taxes and $5,000 for interest as a result of the IRS settlement. The Company estimates additional state interest and penalties totaling $149,000 which was accrued at December 31, 2012.