U.S. and foreign earnings (loss) from continuing operations before income taxes are as follows (in thousands):

The components of the provision (benefit) for income taxes attributable to continuing operations are as follows (in thousands):

	Years Ended December 31,

	2010			2009			2008
Current income tax provision (benefit):
Federal	$	27,271		$	(23,186	)	$	101,579
State		7,785			2,744			15,934
Foreign		3,097			2,209			5,282

Current income tax provision (benefit)		38,153			(18,233	)		122,795

Deferred income tax (benefit) provision:
Federal		(7,031	)		29,287			(57,057	)
State		1,646			(769	)		(96,828	)
Foreign		(689	)		(811	)		395

Deferred income tax (benefit) provision		(6,074	)		27,707			(153,490	)

Income tax provision (benefit)	$	32,079		$	9,474		$	(30,695	)

In 2008, the Company recorded a tax benefit of $30.7 million from continuing operations. This benefit included the net effect of several items related to the Spin-Off totaling $64.5 million. These items comprised: the reversal of $48.7 million of deferred tax liabilities related to the Company's investment in Ticketmaster; the establishment of a valuation allowance of $23.7 million associated with deferred tax assets that were distributed to Tree.com; and the recognition of a state and local deferred tax benefit of $39.5 million, primarily related to the re-measurement of deferred assets and liabilities at the Company's effective tax rate following the Spin-Off. The tax benefit also included an $11.6 million benefit of certain foreign tax credits generated by the sale of Jupiter Shop Channel Co., Ltd. ("Jupiter Shop").

The current income tax payable was reduced by $5.2 million, $0.8 million and $0.8 million for the years ended December 31, 2010, 2009 and 2008, respectively, for tax deductions attributable to stock-based compensation. The related income tax benefits of this stock-based compensation were recorded as amounts charged or credited to additional paid-in capital or a reduction in goodwill. In addition, the current income tax payable was reduced by $4.8 million and $4.3 million for the years ended December 31, 2010 and 2009, respectively, for tax deductions attributable to settlements of vested stock-based awards denominated in subsidiaries' equity. The related income tax benefits were recorded as amounts charged or credited to additional paid-in-capital.

The tax effects of cumulative temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are presented below (in thousands). The valuation allowance is related to items for which it is more likely than not that the tax benefit will not be realized.

	December 31,

	2010			2009
	(As Restated)			(As Restated)
Deferred tax assets:
Accrued expenses	$	18,361		$	18,929
Net operating loss carryforwards		35,298			35,210
Tax credit carryforwards		12,765			15,747
Stock-based compensation		68,633			68,126
Income tax reserves, including related interest		64,191			53,499
Intangible and other assets		10,339			27,256
Other		24,011			29,287

Total deferred tax assets		233,598			248,054
Less valuation allowance		(40,266	)		(35,331	)

Net deferred tax assets		193,332			212,723

Deferred tax liabilities:
Investment in subsidiaries		(378,704	)		(380,706	)
Property and equipment		(16,648	)		(17,572	)
Investment in unconsolidated affiliates		(24,509	)		(43,527	)
Other		(8,124	)		(6,494	)

Total deferred tax liabilities		(427,985	)		(448,299	)

Net deferred tax liability	$	(234,653	)	$	(235,576	)

Included in "Other non-current assets" in the accompanying consolidated balance sheet at December 31, 2010 and 2009 is a non-current deferred tax asset of $0.9 million and $1.5 million, respectively. In addition, included in "Other current assets" in the accompanying consolidated balance sheet at December 31, 2010 and 2009 is a current deferred tax asset of $34.9 million and $41.8 million, respectively. Included in "Accrued expenses and other current liabilities" in the accompanying consolidated balance sheet at December 31, 2009 is a current deferred tax liability of $0.2 million.

At December 31, 2010, the Company had federal and state net operating losses ("NOLs") of $44.3 million and $134.0 million, respectively. If not utilized, the federal NOLs will expire at various times between 2020 and 2030, and the state NOLs will expire at various times between 2011 and 2030. Utilization of federal NOLs will be subject to limitations under Section 382 of the Internal Revenue Code of 1986, as amended. In addition, utilization of certain state NOLs may be subject to limitations under state laws similar to Section 382 of the Internal Revenue Code of 1986. At December 31, 2010, the Company had foreign NOLs of $44.4 million available to offset future income. Of these foreign NOLs, $38.2 million can be carried forward indefinitely, and $4.3 million and $1.9 million will expire within five years and twenty years, respectively. During 2010, the Company recognized tax benefits related to NOLs of $4.7 million. Included in this amount was $3.7 million of tax benefits of acquired attributes which was recorded as a reduction of goodwill. At December 31, 2010, the Company had federal and state capital losses of $2.5 million and $209.9 million, respectively. If not utilized, the federal capital losses will expire in 2015, and the state capital losses will expire between 2013 and 2015. Utilization of capital losses will be limited to the Company's ability to generate future capital gains.

At December 31, 2010, the Company had tax credit carryforwards of $14.2 million. Of this amount, $8.1 million related to federal credits for foreign taxes, $5.3 million related to state tax credits for research activities, and $0.8 million related to various state and local tax credits. Of these credit carryforwards, $6.1 million can be carried forward indefinitely and $8.1 million will expire within ten years.

During 2010, the Company's valuation allowance increased by $4.9 million. The valuation allowance increase primarily relates to net unbenefited unrealized losses on equity investments and foreign NOLs, partially offset by a write-off of previously unbenefited deferred tax assets for state capital loss carryforwards. At December 31, 2010, the Company had a valuation allowance of $40.3 million related to the portion of tax loss carryforwards and other items for which it is more likely than not that the tax benefit will not be realized.

A reconciliation of the income tax provision (benefit) to the amounts computed by applying the statutory federal income tax rate to earnings (loss) from continuing operations before income taxes is shown as follows (in thousands):

	Years Ended December 31,

	2010			2009			2008
Income tax provision (benefit) at the federal statutory rate of 35%	$	7,940		$	(331,450	)	$	38,934
Change in tax reserves, net of effect of federal, state and foreign tax benefits		8,696			14,558			12,500
Foreign tax credits		(5,255	)		(5,200	)		(11,608	)
Foreign income taxed at a different statutory tax rate		(4,957	)		(182	)		(6,398	)
State income taxes, net of effect of federal tax benefit		4,794			1,129			(13,015	)
Change in federal valuation allowance on investments in unconsolidated affiliates		3,627			1,446			9,522
Non-deductible expenses		3,069			2,576			3,441
Federal tax credits for research activities		(956	)		(933	)		(1,039	)
Effect of change in estimated state tax rate		516			787			(39,456	)
Tax exempt income		(481	)		(1,148	)		(2,400	)
Net adjustment related to the reconciliation of income tax provision (benefit) accruals to tax returns, net of effect of federal tax benefit		(38	)		(370	)		(2,049	)
Non-deductible impairments of goodwill and intangibles		13,661			315,886			—
Non-deductible goodwill associated with the sale of Match Europe		—			9,175			—
Reversal of deferred tax liability associated with investment in Ticketmaster		—			—			(48,695	)
Establishment of valuation allowance on deferred tax assets distributed to Tree.com		—			—			23,685
Non-deductible expenses related to the Spin-Off		—			—			8,727
Other, net		1,463			3,200			(2,844	)

Income tax provision (benefit)	$	32,079		$	9,474		$	(30,695	)

No federal and state income taxes have been provided on permanently reinvested earnings of certain foreign subsidiaries aggregating $75.8 million at December 31, 2010. The amount of the unrecognized deferred U.S. income tax liability with respect to such earnings is $18.6 million.

A reconciliation of the beginning and ending amount of unrecognized tax benefits, excluding interest, is as follows:

	December 31,

	2010			2009			2008
	(In thousands)
Balance at beginning of year	$	394,294		$	372,633		$	245,168
Additions based on tax positions related to the current year		3,060			2,333			158,242
Additions for tax positions of prior years		9,897			35,432			11,761
Reductions for tax positions of prior years		(13,164	)		(14,991	)		(13,704	)
Settlements		(1,025	)		(1,113	)		(26,304	)
Expiration of applicable statute of limitations		(3,153	)		—			(2,530	)

Balance at end of year	$	389,909		$	394,294		$	372,633

At December 31, 2010 and 2009, unrecognized tax benefits, including interest, were $487.6 million and $462.9 million, respectively. The total unrecognized tax benefits as of December 31, 2010 include $11.9 million that have been netted against the related deferred tax assets. The remaining balance of $475.7 million is reflected in "non-current income taxes payable". Unrecognized tax benefits for the year ended December 31, 2010 decreased by $4.4 million due principally to a net decrease in deductible temporary differences and decreases in reserves established in prior years for statute lapses, partially offset by an increase in reserves related to research credits. Included in unrecognized tax benefits at December 31, 2010 is $101.7 million for tax positions which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility. If unrecognized tax benefits as of December 31, 2010 are subsequently recognized, $103.1 million and $206.9 million, net of related deferred tax assets and interest, would reduce income tax expense from continuing operations and discontinued operations, respectively. If unrecognized tax benefits as of December 31, 2009 are subsequently recognized, $94.3 million and $191.8 million, net of related deferred tax assets and interest, would reduce income tax expense from continuing operations and discontinued operations, respectively. In addition, a continuing operations tax provision of $3.8 million would be required upon the subsequent recognition of unrecognized tax benefits for an increase in the Company's valuation allowance against certain deferred tax assets.

The Company recognizes interest and, if applicable, penalties related to unrecognized tax benefits in income tax expense. Included in income tax expense from continuing operations for the years ended December 31, 2010, 2009 and 2008 is a $9.1 million, $8.3 million and $8.4 million expense, respectively, net of related deferred taxes of $5.8 million, $5.5 million and $5.7 million, respectively, for interest on unrecognized tax benefits. Included in income tax expense from discontinued operations for the years ended December 31, 2010, 2009, and 2008 is a $7.0 million, $3.7 million and $(1.8) million expense (benefit), respectively, net of related deferred taxes of $4.4 million, $2.5 million and $0.9 million, respectively, for interest on unrecognized tax benefits. At December 31, 2010 and 2009, the Company has accrued $97.7 million and $68.7 million, respectively, for the payment of interest. Included in the income tax expense from continuing operations and discontinued operations for the year ended December 31, 2009 is a $3.1 million expense and a $1.3 million expense, respectively, for penalties on unrecognized tax benefits. At December 31, 2010 and 2009, the Company has accrued $5.0 million for penalties.

The Company is routinely under audit by federal, state, local and foreign authorities in the area of income tax. These audits include questioning the timing and the amount of income and deductions and the allocation of income and deductions among various tax jurisdictions. The Internal Revenue Service is currently examining the Company's tax returns for the years ended December 31, 2001 through 2006. The statute of limitations for these years has currently been extended to December 31, 2011, but is expected to be extended further. Various state, local and foreign jurisdictions are currently under examination, the most significant of which are California, New York and New York City, for various tax years beginning with December 31, 2003. Income taxes payable include reserves considered sufficient to pay assessments that may result from examination of prior year tax returns. Changes to reserves from period to period and differences between amounts paid, if any, upon resolution of issues raised in audits and amounts previously provided may be material. Differences between the reserves for tax contingencies and the amounts owed by the Company are recorded in the period they become known. The Company believes that it is reasonably possible that its unrecognized tax benefits could decrease by $41.3 million within twelve months of the current reporting date primarily due to expirations of statutes of limitation, the reversal of deductible temporary differences that will primarily result in a corresponding decrease in net deferred tax assets, the reversal of state tax reserves based upon the receipt of favorable income tax rulings, and settlements. Included in this amount is $4.9 million which will reverse in the first quarter of 2011 as a result of the receipt of a favorable state income tax ruling. An estimate of other changes in unrecognized tax benefits, while potentially significant, cannot be made.