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Income Taxes | 12 Months Ended
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Dec. 31, 2019
Income Tax Disclosure [Abstract] |
Income Taxes |
NOTE 12 |  | Income Taxes
Net deferred tax assets and liabilities as of December 31, 2019 and 2018 are as follows:
Deferred tax assets and liabilities
Table | 12.1 |  |  |  |
(In thousands) |  | 2019 |  | 2018
Total deferred tax assets |  | $ | 63,533 |  |  | $ | 83,082 |
Total deferred tax liabilities |  | (57,791 | ) |  | (13,898 | )
Net deferred tax asset |  | $ | 5,742 |  |  | $ | 69,184 |
Table 12.2 includes the components of the net deferred tax asset as of December 31, 2019 and 2018.
Deferred tax components
Table | 12.2 |  |  |  |
(In thousands) |  | 2019 |  | 2018
Unearned premium reserves |  | $ | 30,487 |  |  | $ | 31,808 |
Benefit plans |  | (10,790 | ) |  | (5,047 | )
Loss reserves |  | 2,175 |  |  | 3,113 |
Unrealized (appreciation) depreciation in investments |  | (36,822 | ) |  | 9,407 |
Mortgage investments |  | 8,359 |  |  | 8,307 |
Deferred compensation |  | 9,270 |  |  | 8,662 |
AMT credit carryforward |  | 8,303 |  |  | 17,521 |
Other, net |  | (5,240 | ) |  | (4,587 | )
Net deferred tax asset |  | $ | 5,742 |  |  | $ | 69,184 |
We used the remaining balance of our Federal net operating loss carryforward to offset taxable income during 2018. We believe that all gross deferred tax assets at December 31, 2018 and 2019 are fully realizable and no valuation allowance has been established. Table 12.3 summarizes the components of the provision for (benefit from) income taxes:
Provision for (benefit from) income taxes
Table | 12.3 |  |  |  |  |  |
(In thousands) |  | 2019 |  | 2018 |  | 2017
Current Federal |  | $ | 162,911 |  |  | $ | (16,272 | ) |  | $ | 73,348 |
Deferred Federal |  | 11,860 |  |  | 185,598 |  |  | 351,677 |
Other |  | (557 | ) |  | 4,727 |  |  | 3,710 |
Provision for income taxes |  | $ | 174,214 |  |  | $ | 174,053 |  |  | $ | 428,735 |
Our income tax expense for 2017 reflects the remeasurement of our net deferred tax assets to reflect the lower corporate tax rate of 21% under the Tax Act. As a result of the lower tax rate, we recorded a decrease to our net deferred tax assets of $133 million with a corresponding increase to our deferred income tax expense for the year ended December 31, 2017. Current federal income tax payments were $158.3 million, $12.2 million, and $22.0 million in 2019, 2018 and 2017, respectively. At December 31, 2019 we owned $176.0 million of tax and loss bonds. Table 12.6 reconciles the federal statutory income tax rate to our effective tax provision rate.
Effective tax rate reconciliation
Table | 12.6 |  |  |  |  |
| 2019 |  | 2018 |  | 2017
Federal statutory income tax rate | 21.0 | % |  | 21.0 | % |  | 35.0 | %
Additional income tax provision (benefit) related to the rate decrease included in the Tax Act | — | % |  | — | % |  | 17.0 | %
Additional income tax provision (benefit) related to IRS litigation | — | % |  | (0.3 | )% |  | 3.7 | %
Tax exempt municipal bond interest | (0.6 | )% |  | (0.7 | )% |  | (1.4 | )%
Other, net | 0.1 | % |  | 0.6 | % |  | 0.4 | %
Effective tax rate | 20.5 | % |  | 20.6 | % |  | 54.7 | %
As previously disclosed, the Internal Revenue Service ("IRS") completed examinations of our federal income tax returns for the years 2000 through 2007 and issued proposed assessments for taxes, interest and penalties related to our treatment of the flow-through income and loss from an investment in a portfolio of residual interests of Real Estate Mortgage Investment Conduits ("REMICs"). In 2018, we finalized an agreement with the IRS to settle all issues in the examinations and related U.S. Tax Court case. As a result of our settlement, we made federal tax and interest payments of $14.8 million during 2018. We also made state tax and interest payments of $36.8 million during 2018. The impact of the agreed upon settlement was previously reflected in our consolidated statements of operations. A reconciliation of the beginning and ending amount of unrecognized tax benefits is shown in table 12.7.
Unrecognized tax benefits reconciliation
Table | 12.7 |  |  |  |  |
(In thousands) |  |  | 2018 |  | 2017
Balance at beginning of year |  |  | $ | 142,821 |  |  | $ | 108,245 |
Additions for tax positions of prior years |  |  | — |  |  | 35,003 |
Reductions for tax positions of prior years |  |  | (3,070 | ) |  | (427 | )
Settlements |  |  | (139,751 | ) |  | — |
Balance at end of year |  |  | $ | — |  |  | $ | 142,821 |
We have no unrecognized tax benefits at December 31, 2018 and December 31, 2019. We have not recorded any uncertain tax positions during 2019. We recognize interest accrued and penalties related to unrecognized tax benefits in income taxes. The statute of limitations related to the consolidated federal income tax return is closed for all years prior to 2015.

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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