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Income Taxes | 12 Months Ended
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Dec. 31, 2020
Income Tax Disclosure [Abstract] |
Income Taxes |
1 8. | Income Taxes
Consolidated (loss) income before provision for income taxes consisted of the following (in thousands):
|  | Year Ended December 31, |
|  | 2020 |  |  | 2019 |  |  | 2018 |
U.S. |  | $ | (76,324 | ) |  | $ | (154,605 | ) |  | $ | (160,032 | )
Non U.S. |  |  | 1,084 |  |  |  | 2,005 |  |  |  | 1,133 |
Total |  | $ | (75,240 | ) |  | $ | (152,600 | ) |  | $ | (158,899 | )
No income tax expense was recorded for the years ended December 31, 2020, 2019 and 2018 due to our full valuation allowance position. The difference between the consolidated income tax benefit and the amount computed by applying the federal statutory income tax rate to the consolidated loss before income taxes was as follows (in thousands):
|  | Year Ended December 31, |
|  | 2020 |  |  | 2019 |  |  | 2018 |
Income tax benefit at federal statutory rate |  | $ | (15,756 | ) |  | $ | (32,046 | ) |  | $ | (33,366 | )
State tax |  |  | (3,194 | ) |  |  | (3,153 | ) |  |  | (5,591 | )
Business credits |  |  | (773 | ) |  |  | (1,757 | ) |  |  | (3,065 | )
Uncertain tax positions |  |  | 193 |  |  |  | 5,426 |  |  |  | - |
Deferred compensation charges |  |  | 809 |  |  |  | 4,600 |  |  |  | (1,165 | )
Change in valuation allowance |  |  | 19,009 |  |  |  | 22,715 |  |  |  | 43,134 |
Section 162(m) limitation |  |  | 473 |  |  |  | 2,439 |  |  |  | - |
Mark-to-market of warrants |  |  | (866 | ) |  |  | 1,575 |  |  |  | - |
Other |  |  | 105 |  |  |  | 201 |  |  |  | 53 |
Total income tax expense |  | $ | - |  |  | $ | - |  |  | $ | - |
Deferred tax assets and liabilities consisted of the following (in thousands):
|  | December 31, |
|  | 2020 |  |  | 2019 |
Deferred tax assets: |  |  |  |  |  |  |  |
Net operating loss carry forwards |  | $ | 224,161 |  |  | $ | 207,385 |
Research tax credit carry forwards |  |  | 28,578 |  |  |  | 27,883 |
Accruals and reserves |  |  | 17,264 |  |  |  | 17,312 |
Capitalized research costs |  |  | - |  |  |  | 256 |
Other |  |  | 3,250 |  |  |  | 2,437 |
Total deferred tax assets |  |  | 273,253 |  |  |  | 255,273 |
Less valuation allowance |  |  | (266,100 | ) |  |  | (247,092 | )
Net deferred tax assets |  |  | 7,153 |  |  |  | 8,181 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Fixed assets |  |  | (275 | ) |  |  | (275 | )
Operating lease right-of-use assets |  |  | (6,878 | ) |  |  | (7,906 | )
Total deferred tax liabilities |  |  | (7,153 | ) |  |  | (8,181 | )
Net deferred tax assets |  | $ | - |  |  | $ | - |
The tax benefit of net operating losses, temporary differences and credit carryforwards is required to be recorded as an asset to the extent that management assesses that realization is “more likely than not.” Realization of the future tax benefits is dependent on our ability to generate sufficient taxable income within the carryforward period. Because of our recent history of operating losses, management believes that recognition of the deferred tax assets arising from the above-mentioned future tax benefits is currently not likely to be realized and, accordingly, has provided a full valuation allowance. The valuation allowance increased by $19.0 million and $22.3 million for the years ended December 31, 2020 and 2019, respectively, due to an increase in our deferred tax assets. As of December 31, 2020, we had federal net operating loss carryforwards of approximately $955.0 million, which will begin to expire in the year 2021 and federal research and development tax credits of approximately $22.5 million, which expire in the years 2021 through 2040. As of December 31, 2020, we had net operating loss carryforwards for California and other states for income tax purposes of approximately $373.2 million, which expire in the years 2021 through 2040, and California state research and development tax credits of approximately $19.8 million, which do not expire. As of December 31, 2020, we had net operating loss carryforwards for foreign income tax purposes of approximately $6.7 million, which do not expire. Uncertain Income Tax positions The total amount of unrecognized tax benefits was $10.6 million and $10.3 million as of December 31, 2020 and 2019, respectively. If recognized, none of the unrecognized tax benefits would affect the effective tax rate. The following table summarizes the activity related to our unrecognized tax benefits:
Balance at December 31, 2019 |  | $ | (10,322 | )
Tax positions related to the current year |  |  |  |
Additions |  |  | (243 | )
Reductions |  |  | - |
Tax positions related to the prior year |  |  |  |
Additions |  |  | - |
Reductions |  |  | - |
Balance at December 31, 2020 |  | $ | (10,565 | )
Our policy is to account for interest and penalties as income tax expense. As of December 31, 2020, there was no interest related to unrecognized tax benefits. No amounts of penalties related to unrecognized tax benefits were recognized in the provision for income taxes. We do not anticipate any significant change within 12 months of this reporting date of its uncertain tax positions. The Tax Reform Act of 1986 limits the annual use of net operating loss and tax credit carryforwards in certain situations where changes occur in stock ownership of a company. In the event there is a change in ownership, as defined, the annual utilization of such carryforwards could be limited. Based on an analysis under Section 382 of the Internal Revenue Code, completed through December 31, 2018, we experienced ownership changes in 2008, 2009 and 2012 which limit the future use of its pre-change federal net operating loss carryforwards and federal research and development tax credits. We excluded these federal net operating loss carryforwards and federal research and development tax credits that will expire as a result of the annual limitations in the deferred tax assets as of December 31, 2020. A limitation calculation has not been performed with respect to the California net operating loss carryforwards and research and development tax credits and we believe that our ability to use these California net operating loss carryforwards and research and development tax credits in the future may be limited. We have not completed an analysis and a limitation calculation has not been performed subsequent to the period ending December 31, 2018. Due to equity issuances in 2020 and 2019 and changes in ownership of our common stock, we believe that our net operating losses and tax credits in the future may be further limited. We are subject to income tax examinations for U.S. federal and state income taxes from 2001 forward. We are subject to tax examination in Germany from 2017 forward and in India from 2018 forward.

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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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