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Income Taxes | 12 Months Ended
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Dec. 31, 2016
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes Reconciliations of the statutory U.S. federal income tax rates to our effective tax rate for continuing operations follow:
|  | Years Ended December 31,
|  | 2016 |  | 2015 |  | 2014
Statutory rate |  | 35.0 | % |  | 35.0 | % |  | 35.0 | %
State tax, net of federal benefit |  | 3.1 |  |  | 3.0 |  |  | 2.9 |
Impact of state rate change on net deferred tax liabilities, net of federal benefit |  | (0.5 | ) |  | 0.5 |  |  | 4.4 |
State, valuation allowance adjustments on net operating losses |  | 1.0 |  |  | (0.2 | ) |  | (4.0 | )
Unrecognized tax benefits, U.S. federal and state, net of federal benefit |  | 1.6 |  |  | (0.5 | ) |  | 4.8 |
Other, net |  | (0.6 | ) |  | (0.3 | ) |  | (1.2 | )
Effective tax rate |  | 39.6 | % |  | 37.5 | % |  | 41.9 | %
The effective tax rate varies from the statutory U.S. federal rate of 35 percent primarily due to the impact of state taxes, net of federal benefit, for the years ended December 31, 2016, 2015 and 2014. Income tax expense consists of:
|  | December 31,
|  | 2016 |  | 2015 |  | 2014
Current provision: |  |  |  |  |  |
Federal |  | $ | 228,505 |  |  | $ | 215,950 |  |  | $ | 137,573 |
State |  | 24,336 |  |  | 26,057 |  |  | 43,282 |
Total current provision |  | 252,841 |  |  | 242,007 |  |  | 180,855 |
Deferred (benefit)/provision: |  |  |  |  |  |
Federal |  | (89,518 | ) |  | (69,546 | ) |  | (40,370 | )
State |  | 786 |  |  | (7,681 | ) |  | (518 | )
Total deferred (benefit)/provision |  | (88,732 | ) |  | (77,227 | ) |  | (40,888 | )
Provision for income tax expense |  | $ | 164,109 |  |  | $ | 164,780 |  |  | $ | 139,967 |
The tax effect of temporary differences that give rise to deferred tax assets and liabilities include the following:
|  | December 31,
|  | 2016 |  | 2015
Deferred tax assets: |  |  |  |
Loan reserves |  | $ | 72,125 |  |  | $ | 45,082 |
Stock-based compensation plans |  | 16,471 |  |  | 16,939 |
Deferred revenue |  | 793 |  |  | 209 |
Operating loss and credit carryovers |  | 8,371 |  |  | 16,106 |
Unrealized losses |  | 5,364 |  |  | 9,949 |
Accrued expenses not currently deductible |  | 13,605 |  |  | 10,696 |
Unrecorded tax benefits |  | 5,702 |  |  | 15,251 |
Other |  | 10,844 |  |  | 9,871 |
Total deferred tax assets |  | 133,275 |  |  | 124,103 |
Deferred tax liabilities: |  |  |  |
Gains on repurchased debt |  | 126,403 |  |  | 190,936 |
Fixed assets |  | 6,831 |  |  | 6,237 |
Acquired intangible assets |  | 6,288 |  |  | 6,724 |
Other |  | 2,933 |  |  | 1,794 |
Total deferred tax liabilities |  | 142,455 |  |  | 205,691 |
Net deferred tax liabilities |  | $ | (9,180 | ) |  | $ | (81,588 | )
Included in operating loss carryovers is a valuation allowance of $88.4 million and $83.7 million as of December 31, 2016 and 2015, respectively, against a portion of our state net operating loss carryovers that management believes is more likely than not to expire prior to being realized. As of December 31, 2016, we have apportioned state net operating loss carryforwards of $12.9 million which begin to expire in 2029. Accounting for Uncertainty in Income Taxes The following table summarizes changes in unrecognized tax benefits:
|  | December 31,
|  | 2016 |  | 2015 |  | 2014
Unrecognized tax benefits at beginning of year |  | $ | 47,109 |  |  | $ | 59,405 |  |  | $ | 7,344 |
Increases resulting from tax positions taken during a prior period |  | 110,894 |  |  | 3,456 |  |  | 45,184 |
Decreases resulting from tax positions taken during a prior period |  | (3,285 | ) |  | (10,121 | ) |  | — |
Increases resulting from tax positions taken during the current period |  | 817 |  |  | 3,447 |  |  | 7,713 |
Decreases related to settlements with taxing authorities |  | (123 | ) |  | (7,481 | ) |  | (236 | )
Reductions related to the lapse of statute of limitations |  | (2,831 | ) |  | (1,597 | ) |  | (600 | )
Unrecognized tax benefits at end of year |  | $ | 152,581 |  |  | $ | 47,109 |  |  | $ | 59,405 |
As of December 31, 2016, the gross unrecognized tax benefits are $152.6 million. Included in the $152.6 million are $120.0 million of unrecognized tax benefits that, if recognized, would favorably impact the effective tax rate. As a part of the Spin-Off, the Company recorded a liability related to uncertain tax positions for which it is indemnified by Navient. In addition, we believe we are indemnified by Navient for uncertain tax positions relating to historical transactions among entities that are now subsidiaries of Navient that should have been recorded at the time of the Spin-Off. See Note 2, “Significant Accounting Policies — Correction Recorded in the Current Period” and “—Income Taxes,” for additional details. Tax related interest and penalty expense is reported as a component of income tax expense. As of December 31, 2016, 2015 and 2014, the total amount of income tax-related accrued interest and penalties, net of related benefit, recognized in the consolidated balance sheets was $20.2 million, $7.0 million and $5.9 million, respectively. For the years ended December 31, 2016, 2015 and 2014, the total amount of income tax-related accrued interest, net of related tax benefit, recognized in the consolidated statements of income was $5.1 million, $1.4 million and $2.3 million, respectively. The Company or one of its subsidiaries files income tax returns at the U.S. federal level and in most U.S. states. U.S. federal income tax returns filed for years 2012 and prior are no longer subject to examination. Various combinations of subsidiaries, tax years, and jurisdictions remain open for review, subject to statute of limitations periods (typically 3 to 4 prior years). We do not expect the resolution of open audits to have a material impact on our unrecognized tax benefits.

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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/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32559-109319 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32718-109319 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32537-109319 + Details
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