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Income Taxes | 12 Months Ended
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Dec. 31, 2017
Income Taxes [Abstract] |
Income Taxes |
11. | Income Taxes
Significant components of deferred tax assets and liabilities included in the consolidated balance sheets at December 31, 2017 and 2016 were as follows (in thousands):
|  | December 31, 2017 |  |  | December 31, 2016 |
Deferred tax assets: |  |  |  |  |  |
Compensation |  | $ | 1,529 |  |  | $ | 1,914 |
Allowance for doubtful accounts |  |  | 478 |  |  |  | 572 |
Lease obligations - closed clinics |  |  | 54 |  |  |  | 57 |
Deferred tax assets |  | $ | 2,061 |  |  | $ | 2,543 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Depreciation and amortization |  | $ | (12,590 | ) |  | $ | (17,896 | )
Other |  |  | (346 | ) |  |  | (383 | )
Deferred tax liabilities |  |  | (12,936 | ) |  |  | (18,279 | )
Net deferred tax liability |  | $ | (10,875 | ) |  | $ | (15,736 | )
As a result of TCJA, the Company revalued its deferred tax assets and liabilities as of December 31, 2017. Based on a review and analysis as of December 31, 2017, the Company estimated a reduction of its net deferred tax liabilities by $4.3 million thereby reducing its provision for income taxes by such amount for the 2017 year. The deferred tax assets and liabilities related to purchased interests not yet finalized may result in an immaterial adjustment. Also during 2017, the Company recorded an adjustment to the deferred tax assets having the effect of reducing its net deferred tax liability of $1.2 million related to acquisitions of non-controlling interests in 2016 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 $1.7 million and a charge to current year provision for income taxes of $0.3 million. At December 31, 2017, the Company had a federal income tax payable of $2.8 million (included in current liabilities – accrued expenses on the accompanying consolidated balance sheet) and a state income tax receivable of $2.2 million. As of December 31, 2016, the Company had a federal tax receivable of $0.7 million and a state tax receivable of $1.5 million (prior to adjustment of $1.7 million: state tax receivable adjustment $0.6 million and federal tax receivable adjustment of $1.1 million). The tax receivables are 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, 2017, 2016 and 2015 were as follows (in thousands):
|  | December 31, 2017 |  |  | December 31, 2016 |  |  | December 31, 2015 |
U. S. tax at statutory rate |  | $ | 9,900 |  |  |  | 35.0 | % |  | $ | 11,351 |  |  |  | 35.0 | % |  | $ | 11,991 |  |  |  | 35.0 | %
Tax legislation adjustment |  | $ | (4,325 | ) |  |  | -15.3 | % |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
State income taxes, net of federal benefit and tax reform |  |  | 1,060 |  |  |  | 3.7 | % |  |  | 945 |  |  |  | 2.9 | % |  |  | 1,337 |  |  |  | 3.9 | %
Excess equity compensation deduction |  |  | (1,139 | ) |  |  | -4.0 | % |  |  | (911 | ) |  |  | -2.8 | % |  |  | - |  |  |  | - |
Non-deductible expenses |  |  | 560 |  |  |  | 2.0 | % |  |  | 495 |  |  |  | 1.5 | % |  |  | 319 |  |  |  | 0.9 | %
Other |  |  | (24 | ) |  |  | -0.1 | % |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
|  | $ | 6,032 |  |  |  | 21.3 | % |  | $ | 11,880 |  |  |  | 36.6 | % |  | $ | 13,647 |  |  |  | 39.8 | %
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. For 2017, the excess equity compensation deduction amount was $1.3 million. The federal tax portion is shown above as excess equity compensation deduction. Significant components of the provision for income taxes for the years ended December 31, 2017, 2016 and 2015 were as follows (in thousands):
|  | December 31, 2017 |  |  | December 31, 2016 |  |  | December 31, 2015 |
Current: |  |  |  |  |  |  |  |  |
Federal |  | $ | 9,332 |  |  | $ | 7,620 |  |  | $ | 6,502 |
State |  |  | 1,564 |  |  |  | 1,281 |  |  |  | 1,192 |
Total current |  |  | 10,896 |  |  |  | 8,901 |  |  |  | 7,694 |
Deferred: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  |  | (5,233 | ) |  |  | 2,548 |  |  |  | 5,302 |
State |  |  | 369 |  |  |  | 431 |  |  |  | 651 |
Total deferred |  |  | (4,864 | ) |  |  | 2,979 |  |  |  | 5,953 |
Total income tax provision |  | $ | 6,032 |  |  | $ | 11,880 |  |  | $ | 13,647 |
For 2017, 2016 and 2015, 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 $312,000, $34,000 and $147,000 for 2017, 2016, and 2015, 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 2014 through 2016 and U.S. state jurisdictions are open for periods ranging from 2013 through 2016. The Company does not believe that it has any significant uncertain tax positions at December 31, 2017, 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, 2017, 2016 and 2015.

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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 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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