10.Income Taxes

 

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

 

 

The Company's effective tax rate in the three months ended March 31, 2016, was lower than the effective tax rate in the three months ended March 31, 2015, primarily due to various permanent items, accrual for reserves for uncertain tax positions and research and development tax credit generation.

 

The liability for unrecognized tax benefits reported in other non-current liabilities was $14,423 and $14,129 at March 31, 2016 and December 31, 2015, respectively. At March 31, 2016, the amount of unrecognized tax benefits that would benefit the Company’s effective tax rate, if recognized, was $13,976. At this time, the Company does not believe the liability will decrease materially 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 $234 and $(158) as of March 31, 2016 and December 31, 2015, 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, 2014, 2013, and 2012 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, 2014, 2013, 2012, 2011 and 2010 remain open to examination by various state revenue services.

 

Our Indian subsidiaries are currently under examination by the India Tax Authority for the fiscal years ending March 31, 2005 and forward. Based on the outcome of the examinations of our subsidiaries or the result of the expiration of statutes of limitations it is reasonably possible that the unrecognized tax benefits could change from those recorded in the condensed consolidated balance sheet. It is possible that one or more of these audits may be finalized within the next twelve months.