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Income Taxes | 12 Months Ended
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Dec. 31, 2023
Income Tax Disclosure [Abstract] |
Income Taxes | 14. Income Taxes: The components of the income tax provision (benefit) are as follows (in thousands):
|  | December 31, |
|  | 2023 |  |  | 2022 |  |  | 2021 |
Federal: |  |  |  |  |  |  |  |  |
Current |  | $ | 8,040 |  |  | $ | 38,877 |  |  | $ | 41,592 |
Deferred |  |  | 1,467 |  |  |  | (19,679 | ) |  |  | (20,373 | )
|  |  | 9,507 |  |  |  | 19,198 |  |  |  | 21,219 |
State: |  |  |  |  |  |  |  |  |
Current |  |  | 770 |  |  |  | 2,700 |  |  |  | 16,888 |
Deferred |  |  | 1,772 |  |  |  | (3,092 | ) |  |  | (10,866 | )
|  |  | 2,542 |  |  |  | (392 | ) |  |  | 6,022 |
Total |  | $ | 12,049 |  |  | $ | 18,806 |  |  | $ | 27,241 |
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 (24.9)%, 23.1% and 20.1% for the years ended December 31, 2023, 2022 and 2021, respectively. The effective tax rate for the year ended December 31, 2023 includes $17.8 million of expense related to non-cash impairment charges related to goodwill and a cost-method investment. The effective tax rate for the year ended December 31, 2021 includes a $10.8 million benefit related to a change in estimate of an income tax receivable based on loss carryback provisions under the CARES Act which allow 2020 net operating loss to be carried back for refund at prior 35% federal tax rate. The income tax receivable resulted from a mutual agreement reached with the buyer of our former anesthesiology services medical group to treat a portion of the divestiture as an asset sale for tax purposes. The differences between the effective rate and the United States federal income tax statutory rate are as follows:
|  | December 31, |
|  | 2023 |  |  | 2022 |  |  | 2021 |
Tax at statutory rate |  |  | 21.00 | % |  |  | 21.00 | % |  |  | 21.00 | %
State income tax, net of federal benefit |  |  | 2.79 |  |  |  | 1.53 |  |  |  | 4.72 |
Non-deductible expenses |  |  | (4.43 | ) |  |  | 1.48 |  |  |  | 3.42 |
Equity compensation adjustments |  |  | (3.98 | ) |  |  | 1.35 |  |  |  | 0.77 |
Change in accrual estimates relating to uncertain tax positions |  |  | 0.67 |  |  |  | (3.28 | ) |  |  | (1.08 | )
Change in valuation allowance |  |  | (13.82 | ) |  |  | 1.72 |  |  |  | (0.26 | )
Goodwill impairment |  |  | (26.67 | ) |  | ─ |  |  | ─ |
Other, net |  |  | (0.48 | ) |  |  | (0.69 | ) |  |  | (0.46 | )
Change in tax law |  | ─ |  |  | ─ |  |  |  | (7.97 | )
Income tax provision |  |  | (24.92 | )% |  |  | 23.11 | % |  |  | 20.14 | %
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, |
|  | 2023 |  |  | 2022 |
Allowance for uncollectible accounts |  | $ | 139,998 |  |  | $ | 152,526 |
Reserves and accruals |  |  | 59,218 |  |  |  | 66,969 |
Stock-based compensation |  |  | 3,022 |  |  |  | 3,694 |
Operating loss and other carryforwards |  |  | 34,739 |  |  |  | 28,773 |
Capital loss carryforwards |  |  | 422,809 |  |  |  | 422,793 |
Operating lease assets |  |  | 19,133 |  |  |  | 19,096 |
Property and equipment |  |  | 2,056 |  |  |  | 2,481 |
Other |  |  | 5,520 |  |  |  | 256 |
Deferred tax assets before valuation allowance |  |  | 686,495 |  |  |  | 696,588 |
Less: Valuation allowance |  |  | (435,940 | ) |  |  | (429,260 | )
Deferred tax assets, net of valuation allowance |  |  | 250,555 |  |  |  | 267,328 |
Gross deferred tax liabilities: |  |  |  |  |  |
Amortization |  |  | (162,538 | ) |  |  | (176,398 | )
Operating lease liabilities |  |  | (17,342 | ) |  |  | (16,510 | )
Other |  |  | (2,131 | ) |  |  | (2,133 | )
Total deferred tax liabilities |  |  | (182,011 | ) |  |  | (195,041 | )
Net deferred tax assets |  | $ | 68,544 |  |  | $ | 72,287 |
The Company’s net deferred tax assets were $68.5 million as of December 31, 2023, as compared to $72.3 million at December 31, 2022. The decrease in net deferred tax assets of $3.8 million during the year ended December 31, 2023 was primarily related to decreases in deferred tax assets for allowance for uncollectible accounts of $12.5 million, reserves and accruals of $7.8 million and valuation allowance of $6.7 million, partially offset by increases in deferred tax assets for operating and other loss carryforwards of $5.9 million, other items of of $5.2 million and a decrease in deferred tax liabilities for amortization of $13.9 million. The increase in valuation allowance of $6.7 million primarily related to the effect of the impairment of a cost-method investment included in other. For the years ended December 31, 2023, 2022 and 2021, income tax expense of $1.9 million, $1.1 million and $1.0 million, respectively, was recognized for excess tax deficiencies associated with equity compensation. The Company has $1.71 billion of capital loss carryforwards as of December 31, 2023 which were generated from disposal of its former anesthesiology and radiology services medical groups, of which the majority expire in 2025. As of December 31, 2023, 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 had net operating loss carryforwards for federal and state tax purposes totaling $56.4 million, $46.7 million and $61.7 million at December 31, 2023, 2022 and 2021, respectively. With respect to the December 31, 2023 balance, $18.3 million expires at various times from 2033 through 2042, and $38.1 million does not expire. As of December 31, 2023, 2022 and 2021, the Company’s liability for uncertain tax positions, excluding accrued interest and penalties, was $2.4 million, $2.8 million and $4.9 million, respectively. As of December 31, 2023, the Company had $2.4 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, 2023, 2022 and 2021 (in thousands):
|  | Years Ended December 31, |
|  | 2023 |  |  | 2022 |  |  | 2021 |
Balance at beginning of year |  | $ | 2,838 |  |  | $ | 4,928 |  |  | $ | 6,168 |
Increases related to prior year tax positions |  |  | 70 |  |  |  | 379 |  |  |  | — |
Increases related to current year tax positions |  |  | 200 |  |  |  | 800 |  |  |  | 900 |
Decreases related to lapse of statutes of limitation |  |  | (659 | ) |  |  | (3,269 | ) |  |  | (2,140 | )
Balance at end of year |  | $ | 2,449 |  |  | $ | 2,838 |  |  | $ | 4,928 |
During the year ended December 31, 2023, the Company decreased its liability for uncertain tax positions by $0.4 million, primarily related to expiration of statutes of limitation, partially offset by additional taxes on current year and prior year positions. During the year ended December 31, 2022, the Company decreased its liability for uncertain tax positions by $2.1 million, primarily related to expiration of statutes of limitation, partially offset by additional taxes on current year positions. In addition, the Company anticipates that its liability for uncertain tax positions will increase by $0.8 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, 2023, 2022 and 2021, the Company included $0.2 million, $0.3 million and $0.4 million, respectively, of interest and penalties in income tax expense. At December 31, 2023 and 2022, the Company's accrued liability for interest and penalties related to income tax liabilities totaled $0.3 million and $0.2 million, respectively. The Company is currently subject to U.S. Federal and various state income tax examinations for the tax years 2020 through 2022.

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