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Income Taxes | 12 Months Ended
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Dec. 31, 2020
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The components of income before income taxes consist of the following:
| Year Ended December 31,
| 2020 |  | 2019 |  | 2018
Domestic | $ | 61,470 |  |  | $ | 61,691 |  |  | $ | 56,426 |
International | 106,150 |  |  | 66,418 |  |  | 56,436 |
Income before income taxes | $ | 167,620 |  |  | $ | 128,109 |  |  | $ | 112,862 |
The (provision) benefit for income taxes consists of the following:
| Year Ended December 31,
| 2020 |  | 2019 |  | 2018
Current: |  |  |  |  |
Federal | $ | (11,094) |  |  | $ | (7,696) |  |  | $ | (18,634) |
State | (3,597) |  |  | (2,486) |  |  | (873) |
Foreign | (7,688) |  |  | (12,824) |  |  | (11,303) |
| (22,379) |  |  | (23,006) |  |  | (30,810) |
Deferred: |  |  |  |  |
Federal | (5,194) |  |  | (2,389) |  |  | 7,655 |
State | (1,272) |  |  | (412) |  |  | (508) |
Foreign | (9,780) |  |  | 2,069 |  |  | 52,913 |
| (16,246) |  |  | (732) |  |  | 60,060 |
(Provision) benefit for income taxes | $ | (38,625) |  |  | $ | (23,738) |  |  | $ | 29,250 |
A reconciliation of the U.S. statutory federal income tax rate to the Company’s effective income tax rate is as follows:
| Year Ended December 31,
| 2020 |  | 2019 |  | 2018
Federal statutory rate | 21.0 | % |  | 21.0 | % |  | 21.0 | %
State income taxes, net of federal benefit | 2.9 |  |  | 2.0 |  |  | 0.9 |
Permanent book/tax differences | (0.6) |  |  | 0.2 |  |  | (0.2) |
Stock‑based compensation | (5.2) |  |  | (2.3) |  |  | (2.4) |
Non-deductible officer compensation | 4.6 |  |  | — |  |  | — |
Expenses associated with IPO | 3.3 |  |  | — |  |  | — |
Tax credits | (2.1) |  |  | (3.6) |  |  | (3.3) |
Foreign tax rate differential | (2.0) |  |  | (2.8) |  |  | (4.2) |
Income tax reserves | (0.5) |  |  | 0.9 |  |  | (0.2) |
Intercompany sales of certain operating assets | — |  |  | — |  |  | (41.1) |
Net tax on foreign earnings (GILTI/FDII/FTC) | 0.5 |  |  | 6.1 |  |  | — |
Other | 1.1 |  |  | (3.0) |  |  | (0.2) |
U.S. tax reform | — |  |  | — |  |  | 3.8 |
Effective income tax rate | 23.0 | % |  | 18.5 | % |  | (25.9) | %
During 2018, the Company had intercompany sales of certain intangible operating assets between its foreign subsidiaries. The sales resulted in a 2018 net tax benefit of $46,369 in accordance with the January 1, 2018 early adoption of ASU 2016‑16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory. The following is a summary of the significant components of the Company’s deferred tax assets and liabilities:
| December 31,
| 2020 |  | 2019
Deferred tax assets: |  |  |
Accrued compensation | $ | 31,580 |  |  | $ | 36,195 |
Net operating loss (“NOL”) and credit carryforwards | 7,573 |  |  | 11,544 |
Intangible assets including goodwill | 283 |  |  | 10,371 |
Other accruals not currently deductible | 346 |  |  | 960 |
Allowance for doubtful accounts | 382 |  |  | 472 |
Other comprehensive income | 431 |  |  | 394 |
Lease liabilities | 10,466 |  |  | — |
Other | 138 |  |  | 239 |
Total deferred tax assets | 51,199 |  |  | 60,175 |
Less: Valuation allowance | (1,207) |  |  | (2,329) |
Net deferred tax assets | 49,992 |  |  | 57,846 |
Deferred tax liabilities: |  |  |
Deferred revenues | (7,257) |  |  | (12,830) |
Property and equipment | (1,989) |  |  | (707) |
Operating lease right-of-use assets | (10,070) |  |  | — |
Prepaid expenses | (2,301) |  |  | (1,501) |
Total deferred tax liabilities | (21,617) |  |  | (15,038) |
Net deferred tax assets (liabilities) | $ | 28,375 |  |  | $ | 42,808 |
As of December 31, 2020, the U.S. federal NOL carryforwards with a future benefit of $533 expire in 2033 through 2036. The Canadian credit carryforwards of $1,798 have an indefinite carryforward. The Company’s state NOL carryforwards and state credit carryforwards with a future benefit of $667 expire in 2021 through 2036. In addition, the Company has foreign NOL and credit carryforwards with a future benefit of $4,286 (net of a $289 valuation allowance), which predominately have indefinite expirations. Some transactions can change the aggregate ownership of certain stockholders, which could cause a shift in the ownership of the Company, which pursuant to Internal Revenue Code (“IRC”) Section 382 could then limit on an annual basis the Company’s ability to utilize its U.S. federal NOL carryforwards (and possibly its state NOL carryforwards as well). If that occurred, the Company’s NOL carryforwards would continue to be available to offset taxable income and tax liabilities in future years (until such NOL carryforwards are either used or expire) subject to any IRC Section 382 annual limitation. The Company regularly assesses the need for a valuation allowance against its deferred tax assets by considering both positive and negative evidence related to whether it is more likely than not that the deferred tax assets will be realized. In evaluating the need for a valuation allowance, the Company considers a cumulative loss in recent years as a significant piece of negative evidence. As of December 31, 2020 and 2019, the Company has recorded a valuation allowance against its net deferred tax assets of $1,207 and $2,329, respectively. The valuation allowance is principally related to the losses from a joint venture for which the Company has determined that realization is not more likely than not. On December 22, 2017, the JOBS Act was enacted. U.S. tax reform, among other things, reduces the U.S. federal income tax rate to 21% from 35% in 2018, institutes a dividends received deduction for foreign earnings with a related tax for the deemed repatriation of unremitted foreign earnings, and creates a new U.S. minimum tax on earnings of foreign subsidiaries. The Company completed its accounting for the effects of the JOBS Act in 2018 and has included those effects in (Provision) benefit for income taxes in the consolidated statement of operations. The Company will elect to pay the liability for the deemed repatriation of foreign earnings in installments, as specified by the JOBS Act. Additionally, the JOBS Act requires certain Global Intangible Low‑Taxed Income (“GILTI”) earned by a controlled foreign corporation (“CFC”) to be included in the gross income of the CFC’s U.S. shareholder. The Company has elected the “period cost method” and treats taxes due on future U.S. inclusions in taxable income related to GILTI as a current‑period expense when incurred. The JOBS Act allows a U.S. corporation a deduction equal to a certain percentage of its foreign‑derived intangible income (“FDII”). The Company estimated the impact of the GILTI tax and FDII deduction in determining its 2019 annual effective tax rate that is reflected in its provision for income taxes for the year ended December 31, 2019. As of December 31, 2020, the Company has accumulated undistributed earnings generated by its foreign subsidiaries of approximately $427,696, of which $329,315 was subject to the one‑time transition tax on foreign earnings required by the JOBS Act and the tax on GILTI. The Company intends to indefinitely reinvest these earnings, as well as future earnings from its foreign subsidiaries, in order to fund its international operations. In addition, the Company expects future U.S. cash generation will be sufficient to meet future U.S. cash needs. The Company has not provided for any additional outside basis difference inherent in its foreign subsidiaries, as these amounts continue to be indefinitely reinvested in foreign operations. Determining the amount of unrecognized deferred tax liability related to any additional outside basis difference in these entities is not practicable. In accordance with the indefinite reversal criteria, the foreign currency translation adjustments recorded in other comprehensive income (loss) related to the foreign currency translations have not been tax effected. The following is a reconciliation of the total amounts of unrecognized tax benefits:
| Year Ended December 31,
| 2020 |  | 2019 |  | 2018
Unrecognized tax benefit, beginning of year | $ | 1,763 |  |  | $ | 638 |  |  | $ | 872 |
Tax positions related to prior years: |  |  |  |  |
Additions | 1,436 |  |  | 1,222 |  |  | 80 |
Reductions | (1,723) |  |  | (86) |  |  | (39) |
Lapse of statute of limitations | (253) |  |  | (11) |  |  | (275) |
Unrecognized tax benefit, end of year | $ | 1,223 |  |  | $ | 1,763 |  |  | $ | 638 |
The amount of unrecognized tax benefits as of December 31, 2020, 2019, and 2018 was $1,223, $1,763, and $638, respectively, of which $1,175, $1,733, and $627, respectively, would impact the Company’s effective tax rate if recognized. Interest expense and penalties related to income taxes resulted in a reduction of income tax expense of $20 for the year ended December 31, 2020 and an increase of income tax expense of $101 and $8 for the years ended December 31, 2019 and 2018, respectively. Interest expense and penalties are included in (Provision) benefit for income taxes in the consolidated statements of operations. Accrued interest and penalties as of December 31, 2020 and 2019 totaled $272, $362, and $252, respectively. The Company records the amount of uncertain taxes expected to be paid in the next 12 months as a current liability and records the remaining amount in Other liabilities in the consolidated balance sheets. The Company is subject to income tax in the U.S., as well as numerous state and foreign jurisdictions. The Company settled its audit in the U.K. for years 2014 through 2017. The Company had adequately provided for any adjustments that resulted from the tax examination. The Company is currently under audit in the U.K. for 2018. The Company’s 2018 through 2020 tax years remain subject to examination by the Irish Revenue Commissioners for Irish tax purposes. The Company’s U.S. consolidated federal income tax returns for years 2017 through 2020 remain subject to examination by the Internal Revenue Service. In addition, the Company is under audit in various other foreign taxing jurisdictions that are not material to the consolidated financial statements.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI http://asc.fasb.org/extlink&oid=116825942&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI http://asc.fasb.org/extlink&oid=116825942&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 + Details
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