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Note 10 - Income Taxes Level 1 (Notes) | 12 Months Ended
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Dec. 31, 2019
Income Tax Disclosure [Abstract] |
Income Tax Disclosure [Text Block] | Income Taxes Income Tax Provision The components of our consolidated income tax provision from continuing operations are as follows:
| Year Ended December 31,
(In thousands) | 2019 |  | 2018 |  | 2017
Current provision (benefit) | $ | 19,522 |  |  | $ | (42,398 | ) |  | $ | 59,122 |
Deferred provision | 157,162 |  |  | 120,573 |  |  | 166,527 |
Total income tax provision | $ | 176,684 |  |  | $ | 78,175 |  |  | $ | 225,649 |
The reconciliation of taxes computed at the statutory tax rate of 21% in 2019 and 2018 and 35% in 2017 to the provision for income taxes is as follows:
| Year Ended December 31,
(In thousands) | 2019 |  | 2018 |  | 2017
Provision for income taxes computed at the statutory tax rate | $ | 178,289 |  |  | $ | 143,679 |  |  | $ | 121,358 |
Change in tax resulting from: |  |  |  |  |  |  |  |
Repurchase premium on convertible notes | — |  |  | — |  |  | (96 | )
State tax provision (benefit), net of federal impact | (293 | ) |  | 5,570 |  |  | (15,641 | )
Valuation allowance | 1,941 |  |  | (1,856 | ) |  | 18,197 |
Remeasurement of net deferred tax assets due to the TCJA | — |  |  | — |  |  | 102,617 |
Impact related to settlement of IRS Matter | — |  |  | (73,585 | ) |  | — |
Other, net | (3,253 | ) |  | 4,367 |  |  | (786 | )
Provision for income taxes | $ | 176,684 |  |  | $ | 78,175 |  |  | $ | 225,649 |
Deferred Tax Assets and Liabilities The significant components of our net deferred tax assets and liabilities from continuing operations are summarized as follows:
| December 31,
(In thousands) | 2019 |  | 2018
Deferred tax assets: |  |  |
Accrued expenses | $ | 11,642 |  |  | $ | 17,487 |
Unearned premiums | 34,394 |  |  | 34,686 |
Differences in fair value of financial instruments | — |  |  | 1,115 |
Net unrealized loss on investments | — |  |  | 16,297 |
State income taxes | 65,917 |  |  | 67,069 |
Loss reserves | 1,920 |  |  | 1,044 |
Goodwill and intangibles | 36,282 |  |  | 35,068 |
Deferred policy acquisition and ceding commission costs | 11,190 |  |  | 15,288 |
Share-based compensation | 11,238 |  |  | 10,776 |
Lease liability | 13,293 |  |  | — |
Other | 11,188 |  |  | 13,091 |
Total deferred tax assets | 197,064 |  |  | 211,921 |
Deferred tax liabilities: |  |  |  |  |
Differences in fair value of financial instruments | 5,708 |  |  | — |
Net unrealized gain on investments | 29,303 |  |  | — |
Depreciation | 12,803 |  |  | 12,201 |
Contingency reserve | 137,983 |  |  | — |
Other | 15,914 |  |  | 3,581 |
Total deferred tax liabilities | 201,711 |  |  | 15,782 |
Less: Valuation allowance | 66,437 |  |  | 64,496 |
Net deferred tax asset (liability) | $ | (71,084 | ) |  | $ | 131,643 |
Current and Deferred Taxes As of December 31, 2019, we recorded a net current income tax payable of $39.1 million, which primarily relates to applying the standards of accounting for uncertainty in income taxes. Certain entities within our consolidated group have generated net deferred tax assets of approximately $65.8 million, relating primarily to state and local NOL carryforwards which, if unutilized, will expire during various future tax periods. As a mortgage guaranty insurer, we are eligible for a tax deduction, subject to certain limitations, under Internal Revenue Code Section 832(e) for amounts required by state law or regulation to be set aside in statutory contingency reserves. The deduction is allowed only to the extent that we purchase non-interest bearing U.S. Mortgage Guaranty Tax and Loss Bonds issued by the U.S. Department of the Treasury in an amount equal to the tax benefit derived from deducting any portion of our statutory contingency reserves. As of December 31, 2019, we held $134.8 million of these bonds, which are included as prepaid income taxes within other assets in our consolidated balance sheets. The corresponding deduction of our statutory contingency reserves resulted in the recognition of a net deferred tax liability, which is included in other liabilities in our consolidated balance sheets. Valuation Allowances We are required to establish a valuation allowance against our deferred tax assets when it is more likely than not that all or some portion of our deferred tax assets will not be realized. At each balance sheet date, we assess our need for a valuation allowance. Our assessment is based on all available evidence, both positive and negative. This requires management to exercise judgment and make assumptions regarding whether our deferred tax assets will be realized in future periods. We have determined that certain non-insurance entities within Radian may continue to generate taxable losses on a separate company basis in the near term and may not be able to fully utilize certain state and local NOLs on their state and local tax returns. Therefore, with respect to deferred tax assets relating to these state and local NOLs and other state timing adjustments, we retained a valuation allowance of $66.4 million at December 31, 2019 and $64.5 million at December 31, 2018. IRS Matter In July 2018, we finalized a settlement with the IRS related to adjustments we had been contesting that resulted from the examination by the IRS of our 2000 through 2007 consolidated federal income tax returns. This settlement with the IRS resolved the issues and concluded all disputes related to the IRS Matter. During 2018, we recorded tax benefits of $73.6 million, which includes both the impact of the settlement with the IRS as well as the reversal of certain previously accrued state and local tax liabilities. In 2018, under the terms of the settlement, Radian utilized its “qualified deposits” with the U.S. Department of the Treasury to settle its $31 million obligation to the IRS, and during the first quarter of 2019, the IRS refunded to Radian the remaining $57.2 million that was previously on deposit. See Note 9 for additional information about these qualified deposits. Unrecognized Tax Benefits As of December 31, 2019, we have $17.8 million of unrecognized tax benefits, including $1.3 million of interest and penalties, that would affect the effective tax rate, if recognized. Our policy for the recognition of interest and penalties associated with uncertain tax positions is to record such items as a component of our income tax provision, of which $1.3 million and $2.2 million were recorded for the years ended December 31, 2019 and 2017, respectively. In 2018, we recorded an income tax benefit of $61.6 million for interest and penalties primarily related to our IRS settlement. A reconciliation of the beginning and ending unrecognized tax benefits is as follows:
| Year Ended December 31,
(In thousands) | 2019 |  | 2018
Balance at beginning of period | $ | 33,552 |  |  | $ | 123,951 |
Tax positions related to the current year: |  |  |
Increases | 3,215 |  |  | 5,058 |
Tax positions related to prior years: |  |  |
Increases | 441 |  |  | 26,465 |
Decreases | — |  |  | (43,146 | )
Settlements with taxing authorities | — |  |  | (52,353 | )
Lapses of applicable statute of limitation | — |  |  | (26,423 | )
Balance at end of period | $ | 37,208 |  |  | $ | 33,552 |
Our total net unrecognized tax benefits increased by $3.7 million from December 31, 2018 to December 31, 2019, primarily due to the impact of unrecognized tax benefits associated with our recognition of certain premium income. Over the next 12 months, our unrecognized tax benefits may decrease by approximately $7.5 million due to the expiration of the applicable statute of limitations relating to the 2015 and 2016 tax years. The statute of limitations related to our federal consolidated income tax return remains open for tax years 2015-2018. Additionally, among the entities within our consolidated group, various tax years remain open to potential examination by state and local taxing authorities.

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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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