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Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2020
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The table below summarizes significant components of deferred tax assets and liabilities:
| December 31,
| 2020 |  | 2019
Deferred tax assets |  |  |
Allowance for expected credit losses | $ | 14,676 |  |  | $ | 13,041 |
Accrued vacation and bonus | 30,694 |  |  | 27,438 |
Share-based compensation | 13,522 |  |  | 12,647 |
Notes receivable from employees | 13,333 |  |  | 12,187 |
State net operating loss carryforward | 2,090 |  |  | 2,066 |
Foreign net operating loss carryforward | 9,437 |  |  | 9,388 |
Federal tax credit and capital loss carryforward | — |  |  | 7,336 |
Deferred compensation | 240 |  |  | 2,117 |
Operating lease assets | 41,283 |  |  | 43,397 |
Employee benefits obligations | 2,339 |  |  | 1,191 |
Other, net | 3,701 |  |  | 1,898 |
Total deferred tax assets | 131,315 |  |  | 132,706 |
Deferred tax liabilities |  |  |
Revenue recognition | (8,351) |  |  | (6,732) |
Operating lease liabilities | (28,523) |  |  | (29,671) |
Property and equipment, net | (7,663) |  |  | (3,797) |
Equity debt discount | (6,623) |  |  | (8,890) |
Goodwill and intangible assets | (202,842) |  |  | (209,250) |
Total deferred tax liabilities | (254,002) |  |  | (258,340) |
Foreign withholding tax | (1,980) |  |  | (1,195) |
Valuation allowance | (13,300) |  |  | (19,865) |
Net deferred tax liabilities | $ | (137,967) |  |  | $ | (146,694) |
As of December 31, 2020 and 2019, the Company recorded certain deferred tax assets related to foreign tax credits, capital loss and foreign net operating loss carryforwards, which can be carried forward for periods ranging from 10 years to indefinite. Based on forward-looking financial information, the Company believes it is not more likely than not that the attributes will be utilized. Therefore, valuation allowances of $13.3 million and $19.9 million are recorded against the Company’s deferred tax assets as of December 31, 2020 and 2019, respectively. During the year ended December 31, 2020, a U.S. subsidiary of the Company (the “Licensor”) entered into an intellectual property license agreement with a United Kingdom ("U.K.") subsidiary of the Company (the “Licensee”) in consideration of royalty payments that have been partially prepaid (the "License Agreement"). The prepaid royalties remitted to the Licensor were taxable in the U.S. for the year ended December 31, 2020. The impact on the U.S. current income tax provision was mainly offset by a deferred foreign income tax benefit related to the future tax deductions arising from amortization of intangible assets in the U.K. The License Agreement provided sufficient taxable income in the U.S. to fully utilize the Company’s existing foreign tax credits, which were previously subject to a valuation allowance. As of December 31, 2020, the Company has not recorded a $27.9 million deferred tax liability related to the basis difference in the investment in our foreign subsidiaries, as the investment is considered permanent in nature. The table below summarizes the components of income before income tax provision from continuing operations:
| Year Ended December 31,
| 2020 |  | 2019 |  | 2018
Domestic | $ | 122,800 |  |  | $ | 150,860 |  |  | $ | 96,543 |
Foreign | 139,646 |  |  | 137,590 |  |  | 111,249 |
Total | $ | 262,446 |  |  | $ | 288,450 |  |  | $ | 207,792 |
The table below summarizes the components of income tax provision from continuing operations:
| Year Ended December 31,
| 2020 |  | 2019 |  | 2018
Current |  |  |  |  |
Federal | $ | 22,164 |  |  | $ | 30,651 |  |  | $ | 10,847 |
State | 10,257 |  |  | 7,702 |  |  | 4,447 |
Foreign | 29,390 |  |  | 37,083 |  |  | 21,056 |
| 61,811 |  |  | 75,436 |  |  | 36,350 |
Deferred |  |  |  |  |
Federal | 3,936 |  |  | (1,767) |  |  | 14,538 |
State | 362 |  |  | 785 |  |  | 503 |
Foreign | (14,345) |  |  | (2,730) |  |  | 5,790 |
| (10,047) |  |  | (3,712) |  |  | 20,831 |
Income tax provision | $ | 51,764 |  |  | $ | 71,724 |  |  | $ | 57,181 |
Our income tax provision from continuing operations resulted in effective tax rates that varied from the federal statutory income tax rate as summarized below:
| Year Ended December 31,
| 2020 |  | 2019 |  | 2018
Income tax expense at federal statutory rate | $ | 55,114 |  |  | $ | 60,575 |  |  | $ | 43,636 |
State income taxes, net of federal benefit | 10,567 |  |  | 8,430 |  |  | 4,950 |
Detriment from foreign tax rates | 1,175 |  |  | 3,425 |  |  | 3,655 |
Other expenses not deductible for tax purposes | 3,079 |  |  | 4,362 |  |  | 3,543 |
Adjustment to reserve for uncertain tax positions | (1,231) |  |  | 2,504 |  |  | (132) |
Impact of 2017 U.S. tax reform | — |  |  | (1,088) |  |  | (656) |
Sale of Ringtail business | — |  |  | (2,097) |  |  | 3,798 |
Share-based compensation | (6,560) |  |  | (4,447) |  |  | (1,371) |
Release of valuation allowance on foreign tax credits | (7,336) |  |  | — |  |  | — |
Income tax benefit related to the License Agreement, net | (3,899) |  |  | — |  |  | — |
Other adjustments, net | 855 |  |  | 60 |  |  | (242) |
Income tax provision | $ | 51,764 |  |  | $ | 71,724 |  |  | $ | 57,181 |
The income tax provision for the years ended December 31, 2020 and 2019 was $51.8 million and $71.7 million, respectively. The decrease in expense is primarily attributable to lower pre-tax income in 2020 as compared with 2019, the release of the valuation allowance on foreign tax credits and the income tax benefit related to the License Agreement. 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 2016. We are also no longer subject to state and local or foreign tax examinations by tax authorities for years prior to 2014. Our liability for uncertain tax positions was $7.3 million and $11.1 million as of December 31, 2020 and 2019, respectively. The Company does not expect any of the uncertain tax positions to settle within the next 12 months. As of December 31, 2020, our accrual for the payment of tax-related interest and penalties was not significant.

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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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