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INCOME TAXES | 12 Months Ended
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Dec. 31, 2021
Income Tax Disclosure [Abstract] |
INCOME TAXES | INCOME TAXES Income Tax Provision The components of the income tax benefit are as follows (in thousands):
| Year Ended December 31,
| 2021 |  | 2020 |  | 2019
Current income tax expense (benefit): |  |  |  |  |
Federal | $ | 128 |  |  | $ | (10,705) |  |  | $ | 201 |
State | 262 |  |  | 372 |  |  | (125) |
Current income tax expense (benefit) | 390 |  |  | (10,333) |  |  | 76 |
Deferred income tax provision (benefit): |  |  |  |  |
Federal | 9,912 |  |  | (7,495) |  |  | (10,857) |
State | 996 |  |  | (2,133) |  |  | 2,302 |
Deferred income tax provision (benefit) | 10,908 |  |  | (9,628) |  |  | (8,555) |
Income tax expense (benefit) | $ | 11,298 |  |  | $ | (19,961) |  |  | $ | (8,479) |
A reconciliation of the income tax 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,
| 2021 |  | 2020 |  | 2019
Federal statutory income tax | $ | 17,731 |  |  | $ | (8,931) |  |  | $ | 6,506 |
State income taxes, net | 1,269 |  |  | (3,551) |  |  | (1,832) |
Excess tax deductions on non-cash compensation | (9,401) |  |  | (2,033) |  |  | (13,971) |
Impact of the Coronavirus Aid, Relief, and Economic Security Act | — |  |  | (6,104) |  |  | — |
Research and experimentation tax credit | (3,207) |  |  | (3,800) |  |  | (5,794) |
Impact of certain state legislation, net | — |  |  | — |  |  | 3,932 |
Nondeductible executive compensation | 3,058 |  |  | 1,778 |  |  | 988 |
Increase (decrease) in valuation allowance | 595 |  |  | 2,100 |  |  | 954 |
Uncertain tax positions | 435 |  |  | 458 |  |  | 922 |
Nondeductible meals & entertainment | 239 |  |  | 99 |  |  | 428 |
Other, net | 579 |  |  | 23 |  |  | (612) |
Income tax expense (benefit) | $ | 11,298 |  |  | $ | (19,961) |  |  | $ | (8,479) |
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,
| 2021 |  | 2020
Deferred tax assets: |  |  |
Provision for accrued expenses | $ | 5,405 |  |  | $ | 4,907 |
Leasing | 27,419 |  |  | 24,864 |
Net operating loss carryforwards (a) | 66,977 |  |  | 56,190 |
Non-cash compensation expense | 26,756 |  |  | 20,746 |
Intangible assets | 15,222 |  |  | 12,684 |
Interest limitation | 8,036 |  |  | 4,059 |
Contingent liabilities | — |  |  | 4,507 |
Tax credits | 15,848 |  |  | 13,656 |
Other | 1,079 |  |  | 3,605 |
Total gross deferred tax assets | 166,742 |  |  | 145,218 |
Less: valuation allowance (b) | (6,039) |  |  | (5,802) |
Total deferred tax assets, net of the valuation allowance | 160,703 |  |  | 139,416 |
Deferred tax liabilities: |  |  |
Leasing | (24,590) |  |  | (21,632) |
Property and equipment | (8,156) |  |  | (5,015) |
Equity investment | (25,608) |  |  | — |
Other | (444) |  |  | (653) |
Total gross deferred tax liabilities | (58,798) |  |  | (27,300) |
Net deferred taxes | $ | 101,905 |  |  | $ | 112,116 |
(a)At December 31, 2021, the Company had pre-tax consolidated federal net operating losses ("NOLs") of $220.1 million. The federal NOLs no longer expire under the new TCJA. The Company's NOLs will be available to offset taxable income subject to the Internal Revenue Code Section 382 annual limitation. In addition, the Company has state NOLs of approximately $542.7 million at December 31, 2021 that will expire at various times between 2022 and 2041. (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,
| 2021 |  | 2020
Deferred income tax assets | $ | 87,581 |  |  | $ | 96,224 |
Non-current assets of discontinued operations | 16,589 |  |  | 15,892 |
Deferred income tax liabilities | (2,265) |  |  | — |
Net deferred taxes | $ | 101,905 |  |  | $ | 112,116 |
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. At December 31, 2021, 2020 and 2019, the Company recorded a partial valuation allowance of $6.0 million, $5.8 million and $4.1 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,
| 2021 |  | 2020 |  | 2019
Balance, beginning of the period | $ | 5,802 |  |  | $ | 4,102 |  |  | $ | 2,229 |
Charges to earnings | 237 |  |  | 1,700 |  |  | 1,873 |
Balance, end of the period | $ | 6,039 |  |  | $ | 5,802 |  |  | $ | 4,102 |
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,
| 2021 |  | 2020
Balance, beginning of the period | $ | 2,613 |  |  | $ | 1,996 |
Additions based on tax positions of the current period | 435 |  |  | 570 |
Additions (subtractions) based on tax positions of the prior period | (134) |  |  | 47 |
Balance, end of the period | $ | 2,914 |  |  | $ | 2,613 |
Interest and, if applicable, penalties are recognized related to unrecognized tax benefits in income tax expense. Interest and penalties on unrecognized tax benefits included in income tax expense for each of the years ended December 31, 2021, 2020 and 2019 is immaterial. As of December 31, 2021 and 2020, the accrual for unrecognized tax benefits, including interest, was $2.9 million and $2.6 million, respectively, which 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, 2021, the Company is subject to a federal income tax examination for the tax years 2014 through 2020. In addition, the Company is subject to state and local tax examinations for the tax years 2017 through 2021.

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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=121826272&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=122134291&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=121826272&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=122134291&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=121826272&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 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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