16. Income Taxes

Significant components of deferred tax assets and liabilities are as follows:


	Year Ended December 31,
	2013			2012
Deferred tax assets:
Allowance for doubtful accounts	$	11,126		$	9,204
Accrued vacation and bonus		18,662			8,016
Deferred rent		16,119			16,137
Share-based compensation		21,843			23,730
Notes receivable from employees		26,036			27,791
State net operating loss carryforward & credits		2,454			1,921
Foreign net operating loss carryforward		6,024			7,976
Foreign tax credits		2,169			1,253
Future foreign tax credit asset		6,861			8,406
Deferred compensation		12,463			(152	)
Other — net		9,090			4,783

Total deferred tax assets		132,847			109,065

Deferred tax liabilities:
Revenue recognition		(16,474	)		(19,706	)
Property, equipment and capitalized software		(6,523	)		(819	)
Goodwill and other intangible asset amortization		(210,656	)		(188,737	)

Total deferred tax liabilities		(233,653	)		(209,262	)

Valuation allowance		(10,201	)		(1,939	)

Net deferred tax liabilities	$	(111,007	)	$	(102,136	)

As of December 31, 2013, we have not provided for deferred taxes on $22.5 million of the undistributed non-U.S. subsidiary earnings that are considered permanently invested. If these earnings were distributed in the form of dividends or otherwise, the distributors would be subject to U.S. federal income tax of approximately $7.9 million.

At December 31, 2013 and 2012, the Company believed certain deferred tax assets principally associated with foreign net operating loss, foreign tax credit carryforwards, and other related foreign balance sheet accounts which can be carried forward for periods ranging from 20 years to indefinite, would expire unused based on updated forward-looking financial information. Therefore, valuation allowances of $10.2 million and $1.9 million were recorded against the Company’s net deferred tax assets at December 31, 2013 and 2012, respectively. In assessing the realizability of other deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets may not be realized. The ultimate realization of the deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences are deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Based upon these factors, management believes it is more likely than not that the Company will realize the benefits of deferred tax assets, net of the valuation allowance.

The components of “Income before income tax provision” from continuing operations are as follows:


	Year Ended December 31,
	2013			2012			2011
Domestic	$	32,498		$	40,275		$	123,439
Foreign		(687	)		(37,161	)		29,688

	$	31,811		$	3,114		$	153,127

The components of the income tax provision from continuing operations are as follows:


	Year Ended December 31,
	2013			2012			2011
Current
Federal	$	16,066		$	21,172		$	30,048
State		6,673			6,268			5,844
Foreign		9,599			7,021			5,977

		32,338			34,461			41,869

Deferred
Federal	$	(1,094	)	$	7,553		$	11,858
State		(1,054	)		(719	)		564
Foreign		12,215			(1,195	)		(5,067	)

		10,067			5,639			7,355

Income tax provision	$	42,405		$	40,100		$	49,224

Our income tax provision from continuing operations resulted in effective tax rates that varied from the statutory federal income tax rate as follows:


	Year Ended December 31,
	2013			2012			2011
Income tax expense at federal statutory rate	$	11,134		$	1,090		$	53,595
State income taxes, net of federal benefit		3,270			3,607			4,166
Benefit from lower foreign tax rates		(5,214	)		(5,357	)		(7,115	)
Non-deductible goodwill impairment		29,313			38,635			—
Valuation allowance on foreign tax credits & net operating loss carryforward		8,206			—			—
Other expenses not deductible for tax purposes		2,872			3,682			2,791
Changes in non-taxable contingent consideration		(2,777	)		(1,151	)		(2,367	)
Other adjustments, net		(4,399	)		(406	)		(1,846	)

	$	42,405		$	40,100		$	49,224

We file numerous consolidated and separate income tax returns in the U.S. federal jurisdiction and in many city, state and foreign jurisdictions. We are no longer subject to U.S. federal income tax examinations for years prior to 2011 and are no longer subject to state and local or foreign tax examinations by tax authorities for years prior to 2008. In addition, open tax years related to state and foreign jurisdictions remain subject to examination but are not considered material to our financial position, results of operations or cash flows.

Our liability for uncertain tax positions was $2.9 million and $3.8 million at December 31, 2013 and 2012, respectively. During the first quarter of 2013, the Company effectively settled certain prior year tax matters. As a result, the Company reversed approximately $2.2 million of its liability for uncertain tax positions. Interest and penalties related to uncertain tax positions are classified as operating expenses and are excluded from the income tax provision. At December 31, 2013, our accrual for the payment of tax-related interest and penalties was not material. Management believes that an adequate provision has been made for any adjustments that may result from tax examinations. Although the timing of the resolution and closure of such examinations is not certain, the Company believes it is reasonably possible that tax audit resolutions could reduce its unrecognized tax benefits by approximately $2.3 million in the next 12 months.