Note J—Income Taxes Income tax provision (benefit) consists of the following for the fis- cal years ended March 28, 2004, March 30, 2003 and March 31, 2002: Total income tax provision (benefit) for the fiscal years ended March 28, 2004, March 30, 2003 and March 31, 2002 differs from the amounts computed by applying the United States Federal income tax rate of 34% to income before income taxes as a result of the following: The tax effects of temporary differences that give rise to signifi- cant portions of the deferred tax assets and deferred tax liabilities are presented below: On December 15, 1992, the Company adopted the 1992 Stock Option Plan (the “1992 Plan”), which provides for the issuance of incentive stock options (“ISO’s”) to officers and key employees and nonqualified stock options to directors, officers and key employees. Up to 525,000 shares of common stock have been reserved for issuance under the 1992 Plan. The terms of the options are generally ten years, except for ISO’s granted to any employee, whom prior to the granting of the option, owns stock representing more than 10% of the voting rights, for which the option term will be five years. The exercise price for nonqualified stock options outstanding under the 1992 Plan can be no less than the fair market value, as defined,  of the Company’s common stock at the date of grant. For ISO’s, the exercise price can generally be no less than the fair market value of At March 28, 2004, the Company had a NOL of approximately $1,289 remaining (after certain IRS agreed-upon adjustments and other reductions due to expiring losses) which is available to offset future taxable income through 2005 and general business credit carry- forwards remaining of approximately $120 which may be used to off- set liabilities through 2008. These losses and credits are subject to limitations imposed under the Internal Revenue Code pursuant to Sections 382 and 383 regarding changes in ownership. As a result of these limitations, the Company has recorded a valuation allowance for the Miami Subs loss carryforwards and credits related to the acqui- sition of Miami Subs. The valuation allowance also includes various state NOL’s related to the post-acquisition losses of Miami Subs not utilized on a consolidated basis and carried forward on a state basis. The Company utilized net operating loss carryforwards (“NOL’s”) of approximately $1,965 during fiscal 2004. The determination that the net deferred tax asset of $3,778 and $4,726, at March 28, 2004 and March 30, 2003, respectively, is realizable is based on anticipated future taxable income.  Note K—Stockholders’ Equity, Stock Plans and Other Employee Benefit Plans  1. Stock Option Plans 2004 2003 2002 Federal Current $ 94 $ — $ 985 Deferred 804 (281) (93) 898 (281) 892 State and local Current 60 46 181 Deferred 142 (48) (16) 202 (2) 165 $1,100 $(283) $1,507 2004 2003 2002 Computed “expected” tax (benefit) expense $1,018 $(609) $ 833 Nondeductible amortization 37 99 169 Impairment on nondeductible favorable  lease intangible assets — 87 — State and local income taxes, net of  Federal income tax benefit 181 140 106 Tax-exempt investment earnings (46) (48) (68) Tax refunds received (62) — — Nondeductible meals and entertainment  and other (28) 48 17 $1,100 $(283) $1,057 March 28, March 30, 2004 2003 Deferred tax assets Accrued expenses $ 668 $ 672 Allowance for doubtful accounts 131 167 Impairment of notes receivable 908 855 Deferred revenue 816 806 Depreciation expense and impairment  of long-lived assets 988 1,152 Expenses not deductible until paid 138 238 Amortization of intangibles 308 407 Net operating loss and other carryforwards 751 1,540 Other 65 101 Total gross deferred tax assets $4,773 $5,938 March 28, March 30, 2004 2003 Deferred tax liabilities Amortization of intangibles $ — $ 80 Difference in tax bases of installment gains  not yet recognized 196 335 Unrealized gain on marketable securities and  income on investment in limited partnership 46 46 Other 2 — Total gross deferred tax liabilities 244 461 Net deferred tax asset 4,529 5,477 Less valuation allowance (751) (751) $3,778 $4,726 2004 Annual Report  Nathan’s Famous, Inc. & Subsidiaries page twenty-nine