Quarterly report pursuant to Section 13 or 15(d)

Income Taxes

v3.7.0.1
Income Taxes
3 Months Ended
Mar. 31, 2017
Income Taxes  
Income Taxes

13.    Income Taxes

 

The following table includes the Company’s loss before income tax provision (benefit), income tax provision (benefit) and effective tax rate:

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

March 31,

 

 

    

2017

 

2016

 

Loss before income tax provision (benefit)

 

$

(8,837)

 

$

(16,709)

 

Income tax provision (benefit)

 

 

4,298

 

 

(5,716)

 

Effective tax rate

 

 

(48.6)

%

 

34.2

%

 

The Company’s effective tax rates in the three months ended March 31, 2017 and 2016 were (48.6)% and 34.2%, respectively. The change was primarily due to the valuation allowance the company has put on all U.S. deferreds with the exception of indefinite-lived intangibles and unrepatriated foreign earnings and profits, resulting in no benefit being recognized for the tax loss in the U.S.

 

The gross liability for unrecognized tax benefits was $16,972 and $16,476 at March 31, 2017 and December 31, 2016, respectively. At March 31, 2017, the amount of unrecognized tax benefits that would benefit the Company’s effective tax rate, if recognized, was $16,972. At this time, the Company estimates it is reasonably possible that the liability for unrecognized tax benefits will not decrease in the next twelve months.

 

The Company recognizes potential interest and penalties related to unrecognized tax benefits in income tax expense. The Company had accrued interest and penalties of $510 and $880 as of March 31, 2017 and December 31, 2016, respectively.

 

The Company files a consolidated federal income tax return and separate tax returns with various states. Additionally, foreign subsidiaries of the Company file tax returns in foreign jurisdictions. The Company’s tax returns for the calendar years ended December 31, 2016, 2015, 2014, and 2013 remain open to examination by the Internal Revenue Service in their entirety.  With respect to state taxing jurisdictions, the Company’s tax returns for calendar years ended December 31, 2016, 2015, 2014, 2013, 2012 and 2011 remain open to examination by various state revenue services.

 

The Company’s Indian subsidiaries are currently under examination by the India Tax Authority for the fiscal years ended March 31, 2006 and forward. Based on the outcome of examinations of our subsidiary or the result of the expiration of statutes of limitations it is reasonably possible that the related unrecognized tax benefits could change from those recorded in the consolidated balance sheet. It is possible that one or more of these audits may be finalized within the next twelve months.