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Income Taxes | 12 Months Ended
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Dec. 31, 2014
Income Tax Disclosure [Abstract] |
Income Tax Disclosure | INCOME TAXES The provision (benefit) for income taxes from continuing operations for the years ended December 31, 2012, 2013 and 2014 consisted of (in thousands):
| Year Ended December 31,
| 2012 |  | 2013 |  | 2014
Current: |  |  |  |  |
U. S. federal provision (benefit) | $ | 3,340 |  |  | $ | (672 | ) |  | $ | 1,188 |
State provision (benefit) | (40 | ) |  | (522 | ) |  | 772 |
Total current provision (benefit) | $ | 3,300 |  |  | $ | (1,194 | ) |  | $ | 1,960 |
Deferred: |  |  |  |  |
U. S. federal provision | $ | 3,885 |  |  | $ | 8,708 |  |  | $ | 5,117 |
State provision (benefit) | (391 | ) |  | 1,731 |  |  | 178 |
Total deferred provision | $ | 3,494 |  |  | $ | 10,439 |  |  | $ | 5,295 |
Total income tax provision | $ | 6,794 |  |  | $ | 9,245 |  |  | $ | 7,255 |
A reconciliation of taxes from continuing operations calculated at the U.S. federal statutory rate to those reflected in the Consolidated Statements of Operations for the years ended December 31, 2012, 2013 and 2014 is as follows (in thousands):
| Year Ended December 31, |
| 2012 |  | 2013 |  | 2014 |
| Amount |  | Percent |  | Amount |  | Percent |  | Amount |  | Percent |
Federal statutory rate | $ | 5,818 |  |  | 34.0 |  | % | $ | 8,284 |  |  | 34.0 |  | % | $ | 7,719 |  |  | 34.0 |  | %
Effect of state income taxes, net of federal benefit | 616 |  |  | 3.6 |  |  | 1,462 |  |  | 6.0 |  |  | 831 |  |  | 3.7 |  |
Effect of non-deductible expenses and other, net | 1,266 |  |  | 7.4 |  |  | (633 | ) |  | (2.6 | ) |  | 583 |  |  | 2.6 |  |
Change in valuation allowance | (906 | ) |  | (5.3 | ) |  | 132 |  |  | 0.5 |  |  | (138 | ) |  | (0.6 | ) |
Reduction for tax year 2011 federal audit | — |  |  | — |  |  | — |  |  | — |  |  | (1,740 | ) |  | (7.7 | ) |
Total | $ | 6,794 |  |  | 39.7 |  | % | $ | 9,245 |  |  | 37.9 |  | % | $ | 7,255 |  |  | 32.0 |  | %
On August 1, 2014, we received notification that the IRS completed its examination of our tax year ended December 31, 2011. As a result, we have re-measured our tax liability for unrecognized tax benefits reflecting a reduction to our liability by $7.3 million. This change resulted in a tax benefit recognized in the amount of $1.7 million which reduced our effective tax rate for the year ended December 31, 2014. The remainder of the re-measurement resulted in an increase to Deferred tax liability in the amount of $5.6 million. Additionally, we recognized a credit to interest expense of $0.6 million related to the settled portion of the uncertain tax position. The following table summarizes our unrecognized tax benefit as of December 31, 2013 and 2014 (in thousands):
|  | December 31, 2013 |  | December 31, 2014
Unrecognized tax benefit |  | $ | 7,832 |  |  | $ | 515 |
Interest accrued on unrecognized tax benefits |  | $ | 506 |  |  | $ | — |
In September 2013, the U.S. Department of the Treasury and the IRS released final regulations relating to guidance on applying tax rules to amounts paid to acquire, produce or improve tangible personal property as well as rules for materials and supplies. We adopted the new guidance for our current tax year, which began on January 1, 2014. These regulations have not had a material impact on our financial statements. The tax effects of temporary differences from total operations that give rise to significant deferred tax assets and liabilities at December 31, 2013 and 2014 were as follows (in thousands):
| Year Ended December 31,
| 2013 |  | 2014
Deferred income tax assets: |  |  |
Net operating loss carryforwards | $ | 6,404 |  |  | $ | 2,735 |
Tax credit carryforwards | 788 |  |  | 127 |
State bonus depreciation | 1,254 |  |  | 1,513 |
Accrued liabilities and other | 6,892 |  |  | 9,115 |
Amortization of non-compete agreements | 674 |  |  | 815 |
Preneed liabilities, net | 11,654 |  |  | 9,935 |
Total deferred income tax assets | 27,666 |  |  | 24,240 |
Less valuation allowance | (468 | ) |  | (330 | )
Total deferred income tax assets | $ | 27,198 |  |  | $ | 23,910 |
Deferred income tax liabilities: |  |  |
Amortization and depreciation | $ | (34,887 | ) |  | $ | (43,441 | )
Convertible subordinated notes due 2021 | — |  |  | (11,685 | )
Prepaids and other | (1,447 | ) |  | (1,448 | )
Total deferred income tax liabilities | (36,334 | ) |  | (56,574 | )
Total net deferred tax liabilities | $ | (9,136 | ) |  | $ | (32,664 | )
Current deferred tax asset | $ | 2,779 |  |  | $ | 3,750 |
Non-current deferred tax liabilities | (11,915 | ) |  | (36,414 | )
Total net deferred tax liabilities | $ | (9,136 | ) |  | $ | (32,664 | )
The current deferred tax asset is included in Other current assets at December 31, 2013 and 2014. The non-current deferred tax liability is disclosed on a separate line item on our Consolidated Balance Sheets. We record a valuation allowance to reflect the estimated amount of deferred tax assets for which realization is uncertain. Management reviews the valuation allowance at the end of each quarter and makes adjustments if it is determined that it is more likely than not that the tax benefits will be realized. We recognized a net decrease of $0.1 million in our valuation allowance during 2014. For federal income tax reporting purposes, we have no net operating loss carryforwards. For state reporting purposes, we have approximately $57.1 million of net operating loss carryforwards that will expire between 2015 and 2033, if not utilized. Based on management’s assessment of the various state net operating losses, it was determined that it is more likely than not that the we will be able to realize tax benefits on some portion of the amount of the state losses. The valuation allowance at December 31, 2014 was attributable to the deferred tax asset related to a portion of the state operating losses. We analyze tax benefits for uncertain tax positions and how they are to be recognized, measured, and derecognized in financial statements; provide certain disclosures of uncertain tax matters; and specify how reserves for uncertain tax positions should be classified on the Consolidated Balance Sheets. We have reviewed our income tax positions and identified certain tax deductions, primarily related to business acquisitions that are not certain. Our policy with respect to potential penalties and interest is to record them as “Other” expense and “Interest” expense, respectively. The entire balance of unrecognized tax benefits at December 31, 2014, if recognized, would not materially affect our effective tax rate. We do not anticipate a significant increase or decrease in our unrecognized tax benefits during the next twelve months. We have unrecognized tax benefits for federal and state income tax purposes totaling $0.5 million as of December 31, 2014, resulting from deductions totaling $1.6 million on federal and state returns. We have state net operating loss carryforwards exceeding these deductions, and have accounted for these unrecognized tax benefits by reducing the deferred income tax asset related to the net operating loss carryforwards by the amount of these unrecognized deductions. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands):
| Year Ended December 31,
| 2012 |  | 2013 |  | 2014
Unrecognized tax benefit at beginning of year | $ | 7,617 |  |  | $ | 7,747 |  |  | $ | 7,832 |
Reductions based on tax positions related to the prior year | (259 | ) |  | (93 | ) |  | — |
Reductions for tax year 2011 federal audit | — |  |  | — |  |  | (7,310 | )
Additions based on tax positions related to the current year | 389 |  |  | 209 |  |  | — |
Reductions as a result of a lapse of the applicable statute of limitations | — |  |  | (31 | ) |  | (7 | )
Unrecognized tax benefit at end of year | $ | 7,747 |  |  | $ | 7,832 |  |  | $ | 515 |
The entire balance of unrecognized tax benefits, if recognized, would affect our effective tax rate. The effects of recognizing the tax benefits of uncertain tax positions for the year ended December 31, 2014 were material to our operations. For the year ended December 31, 2014, we did not recognize any penalties or interest in our Consolidated Balance Sheets or our Consolidated Statements of Operations. Our federal income tax returns for 2012 through 2013 are open tax years that may be examined by the Internal Revenue Service. Our unrecognized state tax benefits are related to state returns open from 2003 through 2014.

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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 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 2: 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 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 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=6907707&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=6907707&loc=d3e32537-109319 Reference 6: 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=6907707&loc=d3e32559-109319 + Details
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