10.	INCOME TAXES

The income tax provision, excluding the results of the discontinued United Kingdom operations, consists of the following:

(In thousands)	For the Years Ended December 31,
	2011			2010			2009
Income from continuing operations before provision for income taxes:
Domestic	$	296,366		$	253,490		$	228,885
Foreign		52			7			153
	$	296,418		$	253,497		$	229,038

Current provision (benefit) for income taxes:
Federal	$	87,581		$	66,316		$	63,321
State		6,317			3,651			2,197
Foreign		36			(66	)		(7	)
		93,934			69,901			65,511
Deferred provision (benefit) for income taxes:
Federal		13,272			16,654			15,120
State		2,037			(2,837	)		3,583
Foreign		-			46			-
		15,309			13,863			18,703
Interest and penalties benefit:
Interest		(670	)		(222	)		(29	)
Penalties		(199	)		(152	)		(1,193	)
		(869	)		(374	)		(1,222	)
Provision for income taxes	$	108,374		$	83,390		$	82,992

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities consist of the following:

(In thousands)	As of December 31,
	2011		2010
Deferred tax assets:
Allowance for credit losses	$	56,314	$	46,343
Stock-based compensation		5,895		5,741
Deferred state net operating loss		2,672		2,450
Other, net		4,928		4,022
Total deferred tax assets		69,809		58,556

Deferred tax liabilities:
Valuation of Loans receivable		184,437		161,232
Deferred Loan origination costs		3,379		2,721
Other, net		5,442		2,680
Total deferred tax liabilities		193,258		166,633
Net deferred tax liability	$	123,449	$	108,077

The deferred state net operating loss tax asset arising from the operating loss carry forward for state income tax purposes is expected to expire at various times beginning in 2018, if not utilized. We do not anticipate expiration of the net operating loss carry forwards prior to their utilization.

A reconciliation of the U.S. federal statutory rate to our effective tax rate, excluding the results of the discontinued United Kingdom operations, is as follows:

	For the Years Ended December 31,
	2011			2010			2009
U.S. federal statutory rate		35.0	%		35.0	%		35.0	%
State income taxes		2.1	%		0.2	%		1.6	%
Changes in reserve for uncertain tax positions as a result of settlements and lapsed statutes and related interest		-0.5	%		-2.4	%		-0.1	%
Other		-	%		0.1	%		-0.3	%
Effective tax rate		36.6	%		32.9	%		36.2	%

The differences between the U.S. federal statutory rate and our effective tax rates for 2011, 2010, and 2009 are primarily due to state income taxes and reserves for uncertain tax positions and related interest and penalties that are included in the provision for income taxes. The decrease in the effective tax rate for the year ended December 31, 2010, as compared to 2011 and 2009, is primarily due to a settlement of the Internal Revenue Service ("IRS") examination detailed below and related adjustments to accrued tax reserves and interest as well as adjustments to our state tax liability.

The state income taxes for the years ended December 31, 2011, 2010, and 2009 fluctuate due to variability in the amount of income taxable in various state tax jurisdictions and changes in effective state tax rates. As a result of an adjustment to the deferred tax liability arising from changes in the effective state income tax rate, the effective tax rates for 2011 and 2009 increased by 10 and 30 basis points, respectively.

On June 7, 2010, we reached a settlement with the IRS which concluded the examination of our federal income tax returns for 2004 through 2008 and closed the respective tax years. As a result of the settlement, we agreed to pay a total of $7.6 million in federal and state taxes and interest related to these years. The settlement includes $6.2 million of taxes that represent an acceleration of taxes already provided for in prior periods and the payment did not have an impact on our net income during the reporting periods. We also concluded that all 2004 through 2008 uncertain federal jurisdiction tax positions taken in previous periods are effectively settled and we recorded a reversal of corresponding accrued reserves and interest. This reversal had a favorable impact of $6.2 million (after-tax) on our net income for the year ended December 31, 2010.

The following table is a summary of changes in unrecognized tax benefits:

(In thousands)	For the Years Ended December 31,
	2011			2010			2009
Unrecognized tax benefits at January 1,	$	7,815		$	11,830		$	12,274
Additions based on tax positions related to current year		2,676			2,329			2,564
Additions in tax positions of prior years		377			11			-
Reductions in tax positions of prior years		-			-			(836	)
Settlements		-			(5,813	)		(559	)
Reductions as a result of a lapse of the statute of limitations		(873	)		(542	)		(1,613	)
Unrecognized tax benefits at December 31,	$	9,995		$	7,815		$	11,830

The total amount of unrecognized tax benefit that, if recognized, would favorably affect our effective income tax rate in future periods, was approximately $10.0 million as of December 31, 2011. Accrued interest related to uncertain tax positions were $1.9 million and $1.4 million as of December 31, 2011 and 2010, respectively.

We are subject to income tax in multiple federal and state jurisdictions. Substantially all material foreign tax matters have been concluded through 2010. For state returns, we are generally no longer subject to tax examinations for years prior to 2005.

During 2011, 2010 and 2009, we remitted substantially all of our accumulated earnings from foreign subsidiaries as profits to the U.S. and accrued or paid U.S. income taxes accordingly.