Income Taxes (Tables)

12 Months Ended

Dec. 31, 2019

Income tax expense is as follows (in thousands):


	December 31,
	2019		2018		2017
Current tax expense (benefit):
Federal	$	6,167	$	2,965	$	17,008
State	3,678		(1,433)		3,201
Total current tax expense:	9,845		1,532		20,209
Deferred tax expense (benefit):
Federal	6,219		(2,650)		(19,425)
State	1,074		(854)		(983)
Total deferred tax expense (benefit):	7,293		(3,504)		(20,408)
Total income tax expense (benefit)	$	17,138	$	(1,972)	$	(199)

Reconciliation of Income Tax Expense

A reconciliation of the income tax expense calculated using the applicable federal statutory rate to the actual income tax expense is as follows (in thousands):


	December 31,
	2019		%	2018		%	2017		%
Computed at federal statutory rate	$	21,916	21.0	$	11,134	21.0	$	13,949	35.0
State and local tax expense, net of federal benefit	3,625		3.4	2,367		4.5	2,226		5.6
Net permanent deduction and credit tax benefits from current year	(1,166)		(1.1)	(1,143)		(2.2)	(1,513)		(3.8)

Net uncertain tax positions excluding current permanent deduction and credit benefits	(937)		(0.8)	(3,756)		(7.0)	(373)		(0.9)
Subsidiary basis write off	—		—	(3,423)		(6.5)	—		—
Equity compensation net tax windfall	(8,634)		(8.3)	(2,890)		(5.5)	—		—
State tax apportionment changes	—		—	(3,737)		(7.0)	—		—
Disallowed executive compensation	1,750		1.6	682		1.3	—		—
Tax Reform - revaluation of deferrals	—		—	—		—	(15,130)		(38.0)
Acquisition adjustments	—		—	(1,226)		(2.3)	(1,003)		(2.5)
Acquisition costs	245		0.3	—		—	697		1.7
Other, net	339		0.3	20		—	948		2.4
Total income tax expense	$	17,138	16.4	$	(1,972)	(3.7)	$	(199)	(0.5)

The Company has current period foreign income tax expense and includes global intangible low-taxed income as current period income tax expense, both of which are not material to the overall financial statements.

Deferred Tax Assets and Deferred Tax Liabilities

The tax effect of temporary differences that give rise to a significant portion of the deferred tax assets and deferred tax liabilities are as follows (in thousands):


	December 31,
			2019		2018
Deferred tax assets:
Stock-based compensation	$	8,056	$	9,545
Goodwill and intangible assets	5,516		5,874
Accounts receivable, net	4,442		3,537
Deferred rent	—		696
Tenant improvements	—		569
Liability for appeals	931		5,632
Net operating loss carry-forwards	2,644		1,527
Tax credit carry-forwards	1,815		4,076
Property and equipment	139		49
Accrued expenses and other	5,054		7,839
ROU Liability	5,799		—
Total deferred tax assets	34,396		39,344
Deferred tax liabilities:
Goodwill and intangible assets	42,894		43,400
Section 481(a) adjustment	2,551		5,073
Prepaid expenses	734		668
Capitalized software cost	9,068		8,688
ROU Asset	4,736		—
Total deferred tax liabilities	59,983		57,829
Total net deferred tax liabilities	$	25,587	$	18,485

Reconciliation of Unrecognized Tax Benefits

A reconciliation of the beginning and ending amounts of unrecognized tax benefits are as follows (in thousands):


	2019		2018
Unrecognized tax benefits at January 1	$	4,839	$	8,234
Additions for tax positions taken during prior periods	543		399
Additions for tax positions taken during current period including amended prior years	409		360
Reductions relating to settlements with taxing authorities	—		(2,227)
Reductions related to the expiration of statutes of limitations	(1,542)		(1,927)
Unrecognized tax benefits at December 31	$	4,249	$	4,839