10. Income Taxes

Significant components of deferred tax assets included in the consolidated balance sheets at December 31, 2016 and 2015 were as follows (in thousands):

	December 31, 2016			December 31, 2015
				(as restated)
Deferred tax assets:
Compensation	$	1,914		$	1,830
Allowance for doubtful accounts		572			472
Lease obligations - closed clinics		57			50
Deferred tax assets	$	2,543		$	2,352
Deferred tax liabilities:
Depreciation and amortization	$	(17,896	)	$	(16,142	)
Other		(383	)		(1,718	)
Deferred tax liabilities		(18,279	)		(17,860	)
Net deferred tax liability	$	(15,736	)	$	(15,508	)

During 2016, the Company recorded deferred tax assets of $0.4 million related to acquisitions of non-controlling interests, $2.4 million related to the revaluation of mandatorily redeemable non-controlling interests and $7.4 million related to acquired interests. Also, during 2016, the Company recorded an adjustment to the deferred tax assets of $2.7 million related to acquisitions of non-controlling interests in 2015 based on a detailed reconciliation of its federal and state taxes payable and receivable accounts along with its federal and state deferred tax asset and liability accounts. The offset to this adjustment was a reduction in the previously reported tax receivable of approximately $2.9 million and a charge to additional-paid-in-capital of $0.2 million. At December 31, 2016 and 2015, the Company had a tax receivable of $2.3 million and $3.4 million (prior to adjustment of $2.9 million), respectively, included in other current assets on the accompanying consolidated balance sheets.

The differences between the federal tax rate and the Company’s effective tax rate for results of continuing operations for the years ended December 31, 2016, 2015 and 2014 were as follows (in thousands):

	December 31, 2016					December 31, 2015				December 31, 2014
						(as restated)				(as restated)
U. S. tax at statutory rate	$	11,351		35.0	%	$	11,991	35.0	%	$	11,252	35.0	%
State income taxes, net of federal benefit		945		2.9	%		1,337	3.9	%		1,474	4.6	%
Excess equity compensation deduction		(911	)	-2.8	%		-	0.0	%		-	0.0	%
Non-deductible expenses		495		1.5	%		319	0.9	%		292	0.9	%
	$	11,880		36.6	%	$	13,647	39.8	%	$	13,018	40.5	%

In March 2016, the FASB issued guidance to simplify some provisions in stock compensation accounting. The Company adopted this guidance in the fourth quarter of 2016. Prior to this guidance, excess tax benefits were recorded in additional paid-in capital, but became a component of the income tax provision/benefit in the period in which they occurred. For 2016, the adoption resulted in a reduction of the income tax provision by $1.0 million. The federal tax portion is shown above as excess equity compensation deduction.

Significant components of the provision for income taxes for continuing operations for the years ended December 31, 2016, 2015 and 2014 were as follows (in thousands):

	December 31, 2016		December 31, 2015		December 31, 2014
			(as restated)		(as restated)
Current:
Federal	$	7,620	$	6,502	$	6,972
State		1,281		1,192		940
Total current		8,901		7,694		7,912
Deferred:
Federal		2,548		5,302		4,224
State		431		651		882
Total deferred		2,979		5,953		5,106
Total income tax provision for continuing operations	$	11,880	$	13,647	$	13,018

For 2016, 2015 and 2014, the Company performed a detailed reconciliation of its federal and state taxes payable and receivable accounts along with its federal and state deferred tax asset and liability accounts. As a result of this detailed analysis, the Company recorded an increase in the income tax provision of $34,000, $147,000 and $223,000 for 2016, 2015, and 2014, respectively. The Company considers this reconciliation process to be an annual control.

The Company is required to establish a valuation allowance for deferred tax assets if, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the projected future taxable income and tax planning strategies in making this assessment. Based upon the level of historical taxable income and projections for future taxable income in the periods which the deferred tax assets are deductible, management believes that a valuation allowance is not required, as it is more likely than not that the results of future operations will generate sufficient taxable income to realize the deferred tax assets.

The Company’s U.S. federal returns remain open to examination for 2013 through 2015 and U.S. state jurisdictions are open for periods ranging from 2012 through 2015.

The Company does not believe that it has any significant uncertain tax positions at December 31, 2016, nor is this expected to change within the next twelve months due to the settlement and expiration of statutes of limitation.

The Company did not have any accrued interest or penalties associated with any unrecognized tax benefits nor was any interest expense recognized during the years ended December 31, 2016, 2015 and 2014.