The components of income from continuing operations upon which domestic and foreign income taxes have been provided are as follows:



(in 000s)
Year ended April 30,	2017		2016		2015
Domestic	$	535,378	$	513,746	$	682,744
Foreign	93,909		55,733		60,061
	$	629,287	$	569,479	$	742,805

Foreign income consists principally of intercompany transactions and our tax operations in Canada and Australia.

The components of income tax expense (benefit) for continuing operations are as follows:



(in 000s)
Year ended April 30,	2017			2016			2015
Current:
Federal	$	147,961		$	167,233		$	245,473
State	15,118			(26,980		)	31,501
Foreign	10,678			8,735			9,788
	173,757			148,988			286,762
Deferred:
Federal	39,299			19,937			(30,181		)
State	(5,064		)	13,801			(4,040		)
Foreign	378			3,200			3,520
	34,613			36,938			(30,701		)
Total income taxes for continuing operations	$	208,370		$	185,926		$	256,061

The reconciliation between the income tax provision and the amount computed by applying the statutory federal tax rate of 35% to income taxes of continuing operations is as follows:



Year ended April 30,	2017		2016		2015
U.S. statutory tax rate	35.0	%	35.0	%	35.0	%
Change in tax rate resulting from:
State income taxes, net of federal income tax benefit	1.6	%	2.2	%	3.5	%
Earnings taxed in foreign jurisdictions	(4.6	)%	(2.0	)%	(1.8	)%
Permanent differences	(0.4	)%	(0.2	)%	(0.3	)%
Uncertain tax positions	4.3	%	2.8	%	(1.0	)%
Change in valuation allowance	0.2	%	(0.5	)%	0.2	%
Currency loss on previously taxed income	(1.6	)%	—	%	—	%
Significant state apportionment changes	—	%	(4.3	)%	—	%
Other	(1.4	)%	(0.3	)%	(1.1	)%
Effective tax rate	33.1	%	32.7	%	34.5	%

The effective tax rate for fiscal year 2017 increased 0.4% compared to the prior year. This increase was primarily caused by two items. The tax rate increased 4.3% due to a one-time material state apportionment benefit in the prior year that was not present in the current year. The tax rate increased another 1.5% due to increased income tax reserves related to state apportionment and transfer pricing of intercompany transactions. These items were largely offset by a tax benefit from a foreign currency loss on a distribution of previously taxed income and a moderate shift of our income mix generated in lower tax jurisdictions.

The net loss from discontinued operations for fiscal years 2017, 2016 and 2015 totaled $12.0 million, $9.3 million and $13.1 million, respectively, and was net of tax benefits of $7.0 million, $5.4 million and $8.1 million, respectively.

The significant components of deferred tax assets and liabilities are reflected in the following table:



(in 000s)
As of April 30,	2017			2016
Deferred tax assets:
Accrued expenses	$	4,491		$	7,919
Deferred revenue	36,305			35,066
Allowance for credit losses and related reserves	39,243			69,347
Internally-developed software	55,253			51,998
Deferred and stock-based compensation	17,919			19,075
Net operating loss carry-forward	28,049			26,992
Federal tax benefits related to state unrecognized tax benefits	36,265			31,123
Other	—			10,187
Valuation allowance	(22,844		)	(21,515		)
Total deferred tax assets	194,681			230,192

Deferred tax liabilities:
Prepaid expenses and other	(12,104		)	(3,225		)
Property and equipment	(10,024		)	(19,913		)
Intangibles	(95,385		)	(93,406		)
Total deferred tax liabilities	(117,513		)	(116,544		)

Net deferred tax assets	$	77,168		$	113,648

Our valuation allowance on deferred tax assets increased $1.3 million during the current period. The increase in valuation allowance primarily related to foreign net operating losses generated in the current fiscal year.

Certain of our subsidiaries file stand-alone returns in various states and foreign jurisdictions, and others join in filing consolidated or combined returns in such jurisdictions. As of April 30, 2017, we had net operating losses (NOLs) in various states and foreign jurisdictions. The amount of state NOLs vary by taxing jurisdiction. We maintain a valuation allowance of $22.7 million for the portion of such losses that, more likely than not, will not be realized. If not used, the NOLs will expire in varying amounts during fiscal years 2018 through 2034.

We intend to indefinitely reinvest the earnings of our foreign subsidiaries; therefore, no provision has been made for income taxes that might be payable upon remittance of such earnings. The amount of unrecognized tax liability on these foreign earnings, net of expected foreign tax credits, is approximately $10 million as of April 30, 2017.

Changes in unrecognized tax benefits for fiscal years 2017, 2016 and 2015 are as follows:



(in 000s)
Year ended April 30,	2017			2016			2015
Balance, beginning of the year	$	111,514		$	86,268		$	111,491
Additions based on tax positions related to prior years	14,743			29,294			15,510
Reductions based on tax positions related to prior years	(8,469		)	(25,413		)	(38,783		)
Additions based on tax positions related to the current year	33,264			27,220			22,319
Reductions related to settlements with tax authorities	(293		)	(450		)	(10,450		)
Expiration of statute of limitations	(989		)	(8,922		)	(11,423		)
Other	173			3,517			(2,396		)
Balance, end of the year	$	149,943		$	111,514		$	86,268

The total gross unrecognized tax benefit ending balance as of April 30, 2017, 2016 and 2015, includes $118.2 million, $82.3 million and $55.3 million, respectively, which if recognized, would impact our effective tax rate. The difference results from adjusting the gross balances for such items as federal, state and foreign deferred items, interest and deductible taxes. We believe it is reasonably possible that the balance of unrecognized tax benefits could decrease by approximately $14 million within the next twelve months due to settlements of audit issues and expiration of statutes of limitations.

Interest and penalties, if any, accrued on the unrecognized tax benefits are reflected in income tax expense. The total gross interest and penalties accrued as of April 30, 2017, 2016 and 2015 totaled $21.0 million, $22.3 million and $24.7 million, respectively.

We file a consolidated federal income tax return in the United States with the IRS and file tax returns in various state and foreign jurisdictions. Tax returns are typically examined and either settled upon completion of the examination or through the appeals process. As of April 30, 2017, the Company did not have a U.S. federal income tax return under examination. Our U.S. federal returns for 2012 and all prior periods have been audited by the IRS and are closed. Our U.S. federal returns for 2013 and after have not been audited and remain open to examination. In May of 2017, we received notice from the IRS of their intent to audit our 2014 federal income tax return. With respect to state and local jurisdictions and countries outside of the United States, we are typically subject to examination for three to six years after the income tax returns have been filed. Although the outcome of tax audits is always uncertain, we believe that adequate amounts of tax, interest and penalties have been provided for in the accompanying consolidated financial statements for any adjustments that might be incurred due to federal, state, local or foreign audits.