2010 10-K: Part II Our U.S. NOL carryforward at December 31, 2010 of $2,811,000 is  subject to limitations on the use of the NOL imposed by the U.S.  Internal Revenue Code, and therefore is limited to approximately  $225,000 per year. As of December 31, 2010, our Consolidated Balance Sheet included  a current liability of $654,000 and a non-current liability of $8,173,000  for unrecognized tax benefits. These amounts include interest and  penalties, less any associated tax benefits. The table below reconciles the beginning and ending amount of the  gross unrecognized tax benefits as follows: The following table summarizes our NOL carryforwards for our non- U.S. operations: In 2010, we recorded a net increase of $3,020,000 of gross unrec- ognized tax benefits, of which $3,701,000 increased our income tax  expense by $2,548,000. In addition, we reduced our unrecognized  tax benefits by $681,000 for settlements and lapses of statutes of  limitations, of which $469,000 decreased our income tax expense  by $374,000. The decrease in non-U.S. NOL carryforwards as of December 31,  2010 compared with the prior year primarily reflects the use of NOL  carryforwards in our non-U.S. operations as well as the impact of  currency translations. We have not provided federal and state income taxes on accumulated  undistributed earnings of certain foreign subsidiaries aggregating  approximately $39,400,000 as of December 31, 2010, because these  earnings have been permanently reinvested. It is not practicable to  determine the amount of the unrecognized deferred tax liability  related to the undistributed earnings. We conduct business globally and as a result, we file income tax  returns in U.S. federal, state, local, and foreign jurisdictions. In the  normal course of business we are subject to examination by tax  authorities throughout the world. In 2010, the statute of limitations  lapsed on our 2006 U.S. federal tax returns. The open tax years for  our U.S. Federal tax returns and most state tax returns include the  years 2007 to the present. In non-U.S. jurisdictions, the statute of  limitations generally extends to years prior to 2004. We are currently under audit by various state and local tax author- ities in the United States as well as tax authorities in certain non- U.S. jurisdictions. It is likely that the examination phase of some of  these U.S. federal, state, local, and non-U.S. audits will conclude  in 2011. It is not possible to estimate the impact of current audits  on previously recorded unrecognized tax benefits. We recorded the increase in the liability, net of any tax benefits, to  income tax expense in our Consolidated Statement of Income in 2010. We record interest and penalties related to uncertain tax positions  as part of our income tax expense. The following table summarizes  our gross liability for interest and penalties: As of December 31, 2010, we had $9,089,000 of gross unrecognized  tax benefits, of which $8,482,000, if recognized, would reduce our effective income tax rate and decrease our income tax expense  by $6,895,000. As of December 31 ($000)  2010 2009 Non-U.S. NOLs subject to expiration dates $ 3,113 $ 3,235 from 2016 through 2021 Non-U.S. NOLs with no expiration date 45,934  47,366 Total  $ 49,047 $ 50,601 Non-U.S. NOLs not subject to valuation allowances $ 5,611 $ 4,430 ($000)  2010 2009 Gross unrecognized tax benefits—  $ 6,069 $ 7,674 beginning of the year Increases as a result of tax positions taken 1,720 2,298 during a prior-year period Decreases as a result of tax positions taken (150) — during a prior-year period Increases as a result of tax positions taken 2,131 667 during the current period Decreases relating to settlements with (272)  (3,210) tax authorities Reductions as a result of lapse of the  (409)  (1,360) applicable statute of limitations Gross unrecognized tax benefits—  end of the year  $ 9,089 $ 6,069 As of December 31 ($000)  2010  2009 Liabilities for interest and penalties  $ 1,526 $ 958 Accounting for Uncertainty in Tax Positions 134