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Income Taxes | 12 Months Ended
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Dec. 31, 2016
Income Taxes |
Income Taxes | 12. Income Taxes The components of income before provision for income taxes are as follows (in thousands):
|  | 2016 (52 weeks) |  | 2015 (52 weeks) |  | 2014 (53 weeks) |
Income before provision for income taxes: |  |  |  |  |  |  |  |  |  |
U.S. |  | $ | 16,905 |  | $ | 10,565 |  | $ | 20,899 |
Foreign |  |  | 4,984 |  |  | 1,250 |  |  | 2,416 |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Total |  | $ | 21,889 |  | $ | 11,815 |  | $ | 23,315 |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
The provision (benefit) for income taxes consists of the following (in thousands):
|  | Fiscal Year |  | Fiscal Year |  | Fiscal Year |
|  | 2016 (52 weeks) |  | 2015 (52 weeks) |  | 2014 (53 weeks) |
Currently payable: |  |  |  |  |  |  |  |  |  |
Federal |  | $ | (770 | ) | $ | 5,104 |  | $ | 8,585 |
Foreign |  |  | 664 |  |  | 546 |  |  | 876 |
State |  |  | (637 | ) |  | 1,550 |  |  | 1,878 |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
|  |  | (743 | ) |  | 7,200 |  |  | 11,339 |
Deferred: |  |  |  |  |  |  |  |  |  |
Federal |  |  | 5,562 |  |  | (799 | ) |  | (1,068 | )
Foreign |  |  | 124 |  |  | (307 | ) |  | (505 | )
State |  |  | 2,713 |  |  | (604 | ) |  | 142 |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
|  | $ | 8,399 |  | $ | (1,710 | ) | $ | (1,431 | )
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
|  | $ | 7,656 |  | $ | 5,490 |  | $ | 9,908 |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
A reconciliation of CRA's tax rates with the federal statutory rate is as follows:
|  | Fiscal Year |  | Fiscal Year |  | Fiscal Year |
|  | 2016 |  | 2015 |  | 2014 |
Federal statutory rate |  |  | 35.0 | % |  | 35.0 | % |  | 35.0 | %
State income taxes, net of federal income tax benefit |  |  | 6.1 |  |  | 5.4 |  |  | 3.6 |
Tax law changes |  |  | (0.3 | ) |  | — |  |  | — |
Losses benefited |  |  | (5.0 | ) |  | (9.2 | ) |  | (1.8 | )
Losses not benefited |  |  | — |  |  | 5.0 |  |  | 0.6 |
Foreign rate differential |  |  | (3.3 | ) |  | (2.7 | ) |  | 0.6 |
Foreign tax credit |  |  | (0.7 | ) |  | — |  |  | — |
Uncertain tax positions |  |  | (0.2 | ) |  | 8.7 |  |  | 0.7 |
Nondeductible/nontaxable items |  |  | 3.0 |  |  | 6.8 |  |  | 2.1 |
Prior period adjustments |  |  | (0.5 | ) |  | (0.6 | ) |  | 3.0 |
Change in valuation allowance |  |  | 0.2 |  |  | (1.7 | ) |  | (2.2 | )
GNU goodwill impairment |  |  | — |  |  | 13.4 |  |  | — |
GNU capital gain upon distribution |  |  | 1.1 |  |  | — |  |  | — |
GNU tax provision (benefit) |  |  | 0.2 |  |  | (13.6 | ) |  | 0.9 |
Other |  |  | (0.6 | ) |  | — |  |  | — |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
|  |  | 35.0 | % |  | 46.5 | % |  | 42.5 | %
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
The components of CRA's deferred tax assets (liabilities) are as follows (in thousands):
|  | December 31, 2016 |  | January 2, 2016 |
Deferred tax assets: |  |  |  |  |  |  |
Accrued compensation and related expense |  | $ | 16,359 |  | $ | 25,148 |
Allowance for doubtful accounts |  |  | 2,160 |  |  | 2,159 |
Net operating loss carryforwards |  |  | 3,278 |  |  | 4,097 |
Accrued expenses and other |  |  | 2,482 |  |  | 2,462 |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Total gross deferred tax assets |  |  | 24,279 |  |  | 33,866 |
Less: valuation allowance |  |  | (2,689 | ) |  | (4,003 | )
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Total deferred tax assets net of valuation allowance |  |  | 21,590 |  |  | 29,863 |
Deferred tax liabilities: |  |  |  |  |  |  |
Goodwill and other intangible asset amortization |  |  | 5,670 |  |  | 4,715 |
GNU capital gain upon distribution |  |  | 245 |  |  | — |
Property and equipment |  |  | 4,495 |  |  | 3,723 |
Tax basis in excess of financial basis of convertible debentures |  |  | 1,254 |  |  | 2,569 |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Total deferred tax liabilities |  |  | 11,664 |  |  | 11,007 |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Net deferred tax assets |  | $ | 9,926 |  | $ | 18,856 |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
The net change in the total valuation allowance for fiscal 2016 was a decrease of approximately $1.3 million compared to fiscal 2015. The $1.3 million net decrease is comprised primarily of benefits realized for the use of net operating loss carryforwards related to current year taxable income. At December 31, 2016, CRA had U.S. state and foreign net operating losses of $2.1 million and $1.7 million, respectively. The U.S. state net operating losses have lives between 10 and 20 years and begin to expire in 2026. Of the $2.1 million of state net operating losses, $0.7 million relate to excess tax benefits that have been excluded from the above table. The benefit of these state net operating losses will be recognized as an adjustment to retained earnings as of the beginning of fiscal 2017, coinciding with the Company's adoption of ASU 2016-09, Improvements to Employee Share Based Payment Accounting, which amends ASC 718, Compensation—Stock Compensation. Under the new guidance, excess tax benefits that were not previously recognized because the related tax deduction had not reduced current taxes payable are to be recorded on a modified retrospective basis through a cumulative effect adjustment to retained earnings as of the beginning of the period in which the new guidance is adopted. The foreign operating losses have an indefinite life, except for $0.03 million that will begin to expire in fiscal 2017. GNU has federal and state net operating losses of $7.6 million and $2.5 million, respectively, which are subject to a full valuation allowance and begin to expire in 2017. GNU files separate tax returns and none of its losses are available to offset CRA's consolidated taxable income. The aggregate changes in the balances of gross unrecognized tax benefits were as follows (in thousands):
|  | December 31, 2016 |  | January 2, 2016 |
Balance at beginning of period |  | $ | 1,265 |  | $ | 535 |
Reductions for tax positions taken during prior years |  |  | (21 | ) |  | — |
Additions for tax positions taken during the current year |  |  | 82 |  |  | 892 |
Settlements with tax authorities |  |  | (267 | ) |  | (162 | )
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Balance at end of the period |  | $ | 1,059 |  | $ | 1,265 |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
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CRA files income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. A number of years may elapse before an uncertain tax position, for which CRA has unrecognized tax benefits, is audited and finally resolved. While it is often difficult to predict the final outcome or the timing of resolution of any particular uncertain tax position, CRA believes that its unrecognized tax benefits reflect the most likely outcome. CRA adjusts these unrecognized tax benefits, and the associated interest, in light of changing facts and circumstances. At the end of fiscal 2016, CRA had $121,000 of interest accrued on its unrecognized tax benefit balance for a total unrecognized tax benefit balance on the balance sheet of $1,180,000. Of the total unrecognized tax benefit balance, $97,000 is offset by a future tax deduction when recognized. CRA reported $20,000 of interest and penalties related to unrecognized tax benefits in income tax expense during fiscal 2016 as compared to $18,000 during fiscal 2015. Settlement of any particular position could require the use of cash. Of the total $1,059,000 balance at the end of fiscal 2016, a favorable resolution would result in $874,000 being recognized as a reduction to the effective income tax rate in the period of resolution. It is reasonably likely that $74,000 of gross unrecognized tax benefits will reverse within the next twelve months. The number of years with open tax audits varies depending on the tax jurisdiction. CRA's major taxing jurisdiction is the United States where CRA is no longer subject to U.S. federal examinations by the Internal Revenue Service for years before fiscal 2012. Within the significant states where CRA is subject to income tax, CRA is no longer subject to examinations by state taxing authorities before fiscal 2012. CRA's United Kingdom subsidiary's corporate tax returns are no longer subject to examination by Her Majesty's Revenue and Customs for fiscal years before fiscal 2013. During this fiscal year, 2016, examination by the Internal Revenue Service for fiscal 2014 has commenced. CRA believes its reserves for uncertain tax positions are adequate. CRA has not provided for deferred income taxes or foreign withholding taxes on undistributed earnings from its foreign subsidiaries of approximately $4.0 million as of December 31, 2016 because such earnings are considered to be indefinitely reinvested. CRA does not rely on these unremitted earnings as a source of funds for its domestic business as it expects to have sufficient cash flow in the U.S. to fund its U.S. operational and strategic needs. If CRA were to repatriate its foreign earnings that are indefinitely reinvested, it would accrue substantially no additional tax expense.

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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/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 + Details
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