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Income Taxes | 12 Months Ended
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Dec. 31, 2020
Income Tax Disclosure [Abstract] |
Income Taxes |
14. | Income Taxes:
The components of the income tax provision (benefit) are as follows (in thousands):
|  | December 31, |
|  | 2020 |  |  | 2019 |  |  | 2018 |
Federal: |  |  |  |  |  |  |  |  |  |  |  |
Current |  | $ | (16,610 | ) |  | $ | 63,697 |  |  | $ | 65,403 |
Deferred |  |  | 28,719 |  |  |  | (45,660 | ) |  |  | (29,667 | )
|  |  | 12,109 |  |  |  | 18,037 |  |  |  | 35,736 |
State: |  |  |  |  |  |  |  |  |  |  |  |
Current |  |  | (2,954 | ) |  |  | 8,561 |  |  |  | 15,185 |
Deferred |  |  | 7,573 |  |  |  | (10,022 | ) |  |  | (6,227 | )
|  |  | 4,619 |  |  |  | (1,461 | ) |  |  | 8,958 |
Total |  | $ | 16,728 |  |  | $ | 16,576 |  |  | $ | 44,694 |
The Company files its tax return on a consolidated basis with its subsidiaries, and its affiliated professional contractors file tax returns on an individual basis. The effective tax rate for continuing operations was 234.0%, 28.2% and 26.9% for the years ended December 31, 2020, 2019 and 2018, respectively. The increase in the effective tax rate for the year ended December 31, 2020 as compared to the years ended December 31, 2019 and 2018 was due to a significant reduction in pre-tax income as a result of the impacts from the transformational and restructuring related expenses and COVID-19. The differences between the effective rate and the United States federal income tax statutory rate are as follows:
|  | December 31, |
|  | 2020 |  |  | 2019 |  |  | 2018 |
Tax at statutory rate |  |  | 21.00 | % |  |  | 21.00 | % |  |  | 21.00 | %
State income tax, net of federal benefit |  |  | 24.34 |  |  |  | 6.45 |  |  |  | 4.41 |
Non-deductible expenses |  |  | 60.44 |  |  |  | 3.98 |  |  |  | 0.85 |
Equity compensation adjustments |  |  | 98.61 |  |  |  | 6.45 |  |  |  | 0.78 |
Change in accrual estimates relating to uncertain tax positions |  |  | 4.22 |  |  |  | (9.63 | ) |  |  | (0.84 | )
Change in valuation allowance |  |  | 23.67 |  |  |  | 0.39 |  |  |  | — |
Other, net |  |  | 1.71 |  |  |  | (0.45 | ) |  |  | 1.42 |
Change in tax law |  |  | — |  |  |  | — |  |  |  | (0.71 | )
Income tax provision |  |  | 233.99 | % |  |  | 28.19 | % |  |  | 26.91 | %
All of the Company’s deferred tax assets and liabilities are classified as long-term. The significant components of deferred income tax assets and liabilities are as follows (in thousands):
|  | December 31, |
|  | 2020 |  |  | 2019 |
Allowance for uncollectible accounts |  | $ | 79,755 |  |  | $ | 170,123 |
Reserves and accruals |  |  | 64,445 |  |  |  | 54,685 |
Stock-based compensation |  |  | 7,517 |  |  |  | 11,493 |
Operating loss and other carryforwards |  |  | 16,767 |  |  |  | 6,691 |
Capital loss carryforwards |  |  | 447,854 |  |  |  | 17,082 |
Operating lease assets |  |  | 15,042 |  |  |  | 15,389 |
Property and equipment |  |  | 3,044 |  |  |  | 3,986 |
Other |  |  | 571 |  |  |  | — |
Deferred tax assets before valuation allowance |  |  | 634,995 |  |  |  | 279,449 |
Less: Valuation allowance |  |  | (458,708 | ) |  |  | (19,286 | )
Deferred tax assets, net of valuation allowance |  |  | 176,287 |  |  |  | 260,163 |
Gross deferred tax liabilities: |  |  |  |  |  |  |  |
Amortization |  |  | (152,969 | ) |  |  | (144,587 | )
Accounting method changes |  |  | (16,352 | ) |  |  | (71,532 | )
Operating lease liabilities |  |  | (14,057 | ) |  |  | (13,405 | )
Other |  |  | (183 | ) |  |  | (463 | )
Total deferred tax liabilities |  |  | (183,561 | ) |  |  | (229,987 | )
Net deferred tax (liabilities) assets |  | $ | (7,274 | ) |  | $ | 30,176 |
The Company’s net deferred tax liabilities were $7.3 million as of December 31, 2020, as compared to net deferred tax assets of $30.2 million at December 31, 2019. The increase in net deferred tax liabilities of $37.5 million during the year ended December 31, 2020 was primarily related to a decrease in deferred tax assets related to allowance for uncollectible accounts partially offset by decrease in deferred tax liabilities for accounting method changes. For the years ended December 31, 2020, 2019 and 2018, income tax expense of $7.1 million, $3.8 million and $1.3 million, respectively, was recognized for excess tax deficiencies. For the year ended December 31, 2020, the Company estimates that it will generate a $1.7 billion capital loss, from the sale of its anesthesiology services medical group, which will expire in 2025. Total capital loss carryforwards as of December 31, 2020 was $1.8 billion. As of December 31, 2020, management has determined that it is more likely than not that the tax benefits related to these carryforwards will not be realized and has recorded a full valuation allowance against the related deferred tax assets. Additionally, the Company has net operating loss carryforwards for federal and state tax purposes totaling $35.4 million, $31.5 million and $27.8 million at December 31, 2020, 2019 and 2018, respectively. With respect to the December 31, 2020 balance, $22.3 million expires at various times from 2022 through 2040, and $13.1 million does not expire. As of December 31, 2020, 2019 and 2018, the Company’s liability for uncertain tax positions, excluding accrued interest and penalties, was $6.2 million, $7.4 million and $11.2 million, respectively. As of December 31, 2020, the Company had $6.2 million of uncertain tax positions that, if recognized, would favorably impact its effective tax rate. The following table summarizes the activity related to the Company’s liability for uncertain tax positions for the years ended December 31, 2020, 2019 and 2018 (in thousands):
|  | Years Ended December 31, |
|  | 2020 |  |  | 2019 |  |  | 2018 |
Balance at beginning of year |  | $ | 7,409 |  |  | $ | 11,185 |  |  | $ | 10,972 |
Increases related to prior year tax positions |  |  | — |  |  |  | 369 |  |  |  | 385 |
Decreases related to prior year tax positions |  |  | (1,041 | ) |  |  | — |  |  |  | — |
Increases related to current year tax positions |  |  | 100 |  |  |  | 1,700 |  |  |  | 2,900 |
Decreases related to divestitures |  |  | (300 | ) |  |  | — |  |  |  | — |
Decreases related to lapse of statutes of limitation |  |  | — |  |  |  | (5,845 | ) |  |  | (3,072 | )
Balance at end of year |  | $ | 6,168 |  |  | $ | 7,409 |  |  | $ | 11,185 |
During the year ended December 31, 2020, the Company decreased its liability for uncertain tax positions by $1.2 million, primarily related to a reduction in tax liability for prior year positions. During the year ended December 31, 2019, the Company decreased its liability for uncertain tax positions by $3.8 million, primarily related to expiration of statutes of limitation, partially offset by additional taxes on current and prior year positions. In addition, the Company anticipates that its liability for uncertain tax positions will decrease by $1.1 million over the next 12 months. The Company includes interest and penalties related to income tax liabilities in income tax expense. During the year ended December 31, 2020, the Company included $0.5 million of interest and penalties in income tax expense. The impact to income tax expense related to penalties and interest was not material during the years ended December 31, 2019 and 2018. At December 31, 2020 and 2019, the Company’s accrued liability for interest and penalties related to income tax liabilities totaled $1.0 million and $0.6 million, respectively. The Company is currently subject to U.S. Federal and various state income tax examinations for the tax years 2015 through 2019.

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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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