INCOME TAXES

The Company accounts for income taxes in accordance with FASB Codification topic, Income Taxes. Deferred income taxes arise from the temporary differences in the recognition of income and expenses for tax purposes. A valuation allowance is established when the Company believes that it is more likely than not that some portion of its deferred tax assets will not be realized. Deferred tax assets and liabilities were comprised of the following at March 31, 2015 and December 31, 2014:



	March 31, 2015		December 31, 2014
Deferred tax assets:
Accounts receivable and financing receivables	$	784,394	$	879,094
Accrued vacation	1,235,431		1,158,764
Stock-based compensation	1,585,105		1,133,986
Deferred revenue	65,777		105,554
Accrued liabilities and other	212,892		175,575
Other comprehensive income	—		11,851
Total deferred tax assets	$	3,883,599	$	3,464,824
Deferred tax liabilities:
Other comprehensive income	$	41,407	$	—
Depreciation	1,286,134		1,528,886
Total deferred tax liabilities	$	1,327,541	$	1,528,886

Significant components of the Company’s income tax provision in the Condensed Consolidated Statements of Income for the three months ended March 31 were as follows:



	2015			2014
Current provision:
Federal	$	2,564,444		$	4,479,631
State	518,021			814,039
Deferred provision:
Federal	(604,314		)	(953,640		)
State	(69,064		)	(108,987		)
Total income tax provision	$	2,409,087		$	4,231,043

The difference between income taxes at the U.S. federal statutory income tax rate of 35% and those reported in the Condensed Consolidated Statements of Income for the three months ended March 31 was as follows:



	2015			2014
Income taxes at U.S. Federal statutory rate	$	2,770,948		$	4,181,135
State income taxes, net of U.S. Federal tax effect	282,628			420,138
Domestic production activities deduction	(228,215		)	(400,132		)
Uncertain tax positions	(402,036		)	—
Other	(14,238		)	29,902
Total income tax provision	$	2,409,087		$	4,231,043

Our effective tax rate decreased to 30.4% for the three months ended March 31, 2015 from 35.4% for the three months ended March 31, 2014, primarily due to beneficial adjustments recorded during the three months ended March 31, 2015 related to our reserves for uncertain tax positions. The federal returns for tax years 2004 through 2009 are currently under examination by the Internal Revenue Service ("IRS"), primarily in relation to research credits claimed on those returns. Interactions with the IRS during the first quarter of 2015 regarding the examination of our federal returns for certain of the tax years under examination resulted in a more refined estimate regarding the expected outcome of the examinations for such tax years, prompting a change in our measurement of reserves for uncertain tax positions as the Company now estimates a more favorable outcome from such examinations.

The Company had unrecognized tax benefits of $1,053,835 related to uncertain tax positions as of March 31, 2015 under the provisions of FASB Codification topic, Income Taxes, which is recorded as a component of income taxes payable within the Condensed Consolidated Balance Sheets. As of March 31, 2015, $160,599 of accrued interest related to such positions had been recorded. As stated previously, the federal returns for the tax years 2004 through 2009 are currently under examination by the IRS, primarily in relation to research credits claimed on those returns, as amended, by the Company. The federal returns for tax years 2010 through 2013 remain open to examination, and returns for tax years 2006 through 2013 remain open to examination by certain other taxing jurisdictions to which the Company is subject.