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INCOME TAXES | 12 Months Ended
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Dec. 31, 2016
Income Tax Disclosure [Abstract] |
INCOME TAXES | INCOME TAXES Income Tax Provision The components of the income tax expense (benefit) are as follows (in thousands):
| Year Ended December 31,
| 2016 |  | 2015 |  | 2014
Current income tax expense (benefit): |  |  |  |  |
Federal | $ | 11,519 |  |  | $ | 5,847 |  |  | $ | (371 | )
State | 2,480 |  |  | 1,149 |  |  | (219 | )
Current income tax expense (benefit) | 13,999 |  |  | 6,996 |  |  | (590 | )
Deferred income tax (benefit) provision: |  |  |  |  |
Federal | 3,703 |  |  | (19,676 | ) |  | 63 |
State | 2,664 |  |  | (10,293 | ) |  | 43 |
Deferred income tax (benefit) provision | 6,367 |  |  | (29,969 | ) |  | 106 |
Income tax expense (benefit) | $ | 20,366 |  |  | $ | (22,973 | ) |  | $ | (484 | )
A reconciliation of the income tax expense (benefit) to the amounts computed by applying the statutory federal income tax rate to income (loss) from continuing operations before income taxes is shown as follows (in thousands):
| Year Ended December 31,
| 2016 |  | 2015 |  | 2014
Income tax expense (benefit) at the federal statutory rate of 35% | $ | 18,051 |  |  | $ | 9,920 |  |  | $ | (340 | )
State income taxes, net of effect of federal tax benefit | 4,038 |  |  | 1,480 |  |  | (143 | )
Change in (release of) valuation allowance | (416 | ) |  | (34,409 | ) |  | — |
Research and experimentation tax credit | (2,574 | ) |  | — |  |  | — |
Other, net | 1,267 |  |  | 36 |  |  | (1 | )
Income tax expense (benefit) | $ | 20,366 |  |  | $ | (22,973 | ) |  | $ | (484 | )
Deferred Income Taxes The tax effects of cumulative temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are as follows (in thousands):
| December 31,
| 2016 |  | 2015
Deferred tax assets: |  |  |
Provision for accrued expenses | $ | 8,056 |  |  | $ | 7,247 |
Net operating loss carryforwards (a) | 8,548 |  |  | 15,036 |
Non-cash compensation expense | 5,699 |  |  | 4,321 |
Goodwill | 1,825 |  |  | 1,825 |
Other | 139 |  |  | 1,544 |
Total gross deferred tax assets | 24,267 |  |  | 29,973 |
Less: valuation allowance (b) | (2,101 | ) |  | (2,341 | )
Total deferred tax assets, net of the valuation allowance | 22,166 |  |  | 27,632 |
Deferred tax liabilities: |  |  |
Intangible and other assets | (2,704 | ) |  | (2,060 | )
Other | (1,071 | ) |  | (453 | )
Total gross deferred tax liabilities | (3,775 | ) |  | (2,513 | )
Net deferred taxes | $ | 18,391 |  |  | $ | 25,119 |
(a) | At December 31, 2016, the Company had pre-tax consolidated federal net operating losses ("NOLs") of $10.9 million. The federal NOLs will expire in 2030. The Company's NOLs will be available to offset taxable income (until such NOLs are either used or expire) subject to the Internal Revenue Code Section 382 annual limitation. In addition, the Company has state NOLs of approximately $221.0 million at December 31, 2016 that will expire at various times between 2017 and 2037.
(b) | The valuation allowance is related to items for which it is "more likely than not" that the tax benefit will not be realized.
Deferred income taxes are presented in the accompanying consolidated balance sheets as follows (in thousands):
| December 31,
| 2016 |  | 2015
Deferred income tax assets | $ | 14,610 |  |  | $ | 20,977 |
Non-current assets of discontinued operations | 3,781 |  |  | 4,142 |
Net deferred taxes | $ | 18,391 |  |  | $ | 25,119 |
Valuation Allowance A valuation allowance is provided on deferred tax assets if it is determined that it is "more likely than not" that the deferred tax asset will not be realized. As of each reporting date, management considers both positive and negative evidence regarding the likelihood of future realization of the deferred tax assets. In the fourth quarter of 2015 the Company concluded, based upon all available evidence, it was more likely than not it would have sufficient future taxable income to realize the majority of its net deferred tax assets. As a result, the Company released the majority of the valuation allowance in 2015. The Company significantly improved its operating performance in 2015, emerged from cumulative losses in recent years due to a cumulative profit position and projects taxable income in future years. While the Company believes the assumptions included in its projections of future taxable income are reasonable, if the actual results vary from expected results due to unforeseen changes in the economy or mortgage industry, or other factors, the Company may need to make future adjustments to the valuation allowance for all, or a portion, of the net deferred tax assets. At December 31, 2016 and 2015, the Company recorded a partial valuation allowance of $2.1 million and $2.3 million, respectively, primarily related to state net operating losses, which the Company does not expect to be able to utilize prior to expiration. A reconciliation of the beginning and ending balances of the deferred tax valuation allowance is as follows (in thousands):
| Year Ended December 31,
| 2016 |  | 2015 |  | 2014
Balance, beginning of the period | $ | 2,341 |  |  | $ | 40,121 |  |  | $ | 49,674 |
Charges to earnings (a) | (240 | ) |  | (37,780 | ) |  | (3,707 | )
Out of period adjustment (b) | — |  |  | — |  |  | (5,846 | )
Balance, end of the period | $ | 2,101 |  |  | $ | 2,341 |  |  | $ | 40,121 |
(a) During 2015, the amount is primarily related to the Company's release of the valuation allowance, current year utilization of net operating loss carryforwards, the write-off of certain state net operating losses that expire in 2015 and state net operating losses not expected to be utilized in future years due to changes in ownership limitations. (b) Out of period adjustment in the valuation allowance is offset by an out of period adjustment to the deferred tax assets, thus the adjustment is limited to disclosure. The error related primarily to the calculation of the federal benefit of the state operating loss carryforwards. Unrecognized Tax Benefits A reconciliation of the beginning and ending amounts of unrecognized tax benefits, excluding interest and penalties, is as follows (in thousands):
| Year Ended December 31,
| 2016 |  | 2015
Balance, beginning of the period | $ | 19 |  |  | $ | 23 |
Additions based on tax positions of the current year | 550 |  |  | — |
Lapse of statute of limitations | (19 | ) |  | (4 | )
Balance, end of the period | $ | 550 |  |  | $ | 19 |
Interest and, if applicable, penalties are recognized related to unrecognized tax benefits in income tax expense. For the year ended December 31, 2015, the Company incurred interest and penalties on unrecognized tax benefits of $0.1 million which was included in income tax expense. Interest and penalties on unrecognized tax benefits included in income tax expense for each of the years ended December 31, 2016 and 2014 was immaterial. As of December 31, 2015, the accrual for interest and penalties was $0.1 million. The accrual for interest and penalties as of December 31, 2016 was immaterial. As of December 31, 2016, the accrual for unrecognized tax benefits, including interest, was $0.6 million, which would benefit the effective tax rate if recognized. As of December 31, 2015, the accrual for unrecognized tax benefits, including interest, was $0.2 million, of which an immaterial amount would benefit the effective tax rate if recognized. Tax Audits LendingTree is subject to audits by federal, state and local authorities in the area of income tax. These audits include questioning the timing and the amount of deductions and the allocation of income among various tax jurisdictions. Income taxes payable include amounts considered sufficient to pay assessments that may result from examination of prior year returns; however, any amounts paid upon resolution of issues raised may differ from the amount provided. Differences between the reserves for tax contingencies and the amounts owed by the Company are recorded in the period they become known. As of December 31, 2016, the Company is subject to a federal income tax examination for the tax years 2012 through 2015. In addition, the Company is subject to state and local tax examinations for the tax years 2013 through 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 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=65882285&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=65882285&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=65882285&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=65882285&loc=d3e32537-109319 + Details
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