XML 45 R24.htm IDEA: XBRL DOCUMENT
v3.22.0.1

Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2021
Income Tax Disclosure [Abstract] |
Income Tax Disclosure | INCOME TAXES The provision for income taxes consisted of the following (in thousands):
| Years Ended December 31,
| 2019 |  | 2020 |  | 2021
Current: |  |  |  |  |
U. S. federal provision (benefit) | $ | (2,039) |  |  | $ | 1,778 |  |  | $ | 8,848 |
State provision (benefit) | (195) |  |  | 2,177 |  |  | 2,989 |
Total current provision (benefit) | $ | (2,234) |  |  | $ | 3,955 |  |  | $ | 11,837 |
Deferred: |  |  |  |  |
U. S. federal provision (benefit) | $ | 8,056 |  |  | $ | 3,994 |  |  | $ | (452) |
State provision (benefit) | 2,061 |  |  | 603 |  |  | (240) |
Total deferred provision (benefit) | $ | 10,117 |  |  | $ | 4,597 |  |  | $ | (692) |
Total income tax provision | $ | 7,883 |  |  | $ | 8,552 |  |  | $ | 11,145 |
A reconciliation of income taxes calculated at the U.S. federal statutory rate to those reflected in the Consolidated Statements of Operations is as follows (dollars in thousands):
| Years Ended December 31, |
| 2019 |  | 2020 |  | 2021 |
| Amount |  | Percent |  | Amount |  | Percent |  | Amount |  | Percent |
Federal statutory rate | $ | 4,707 |  |  | 21.0 |  | % | $ | 5,175 |  |  | 21.0 |  | % | $ | 9,304 |  |  | 21.0 |  | %
Effect of state income taxes, net of federal benefit | 1,352 |  |  | 6.0 |  |  | 2,080 |  |  | 8.4 |  |  | 2,180 |  |  | 4.9 |  |
Effect of non-deductible expenses and other, net | 947 |  |  | 4.2 |  |  | 460 |  |  | 1.9 |  |  | (423) |  |  | (1.0) |  |
Effect of divestitures and impairment of businesses | 911 |  |  | 4.10 |  |  | 846 |  |  | 3.40 |  |  | 103 |  |  | 0.2 |  |
Change in valuation allowance, net of federal benefit | (34) |  |  | (0.2) |  |  | (9) |  |  | — |  |  | (19) |  |  | — |  |
Total | $ | 7,883 |  |  | 35.1 |  | % | $ | 8,552 |  |  | 34.7 |  | % | $ | 11,145 |  |  | 25.1 |  | %
The discrete tax adjustment for the year ended December 31, 2021 includes a $1.2 million excess tax benefit related to share-based payments and other adjustments including return to provision analysis and state legislative changes. We are subject to taxation in the United States and various states. As of December 31, 2021, tax years 2013 to 2020 are subject to examination by taxing authorities. On May 10, 2017, we filed amended federal returns for the tax years ended December 31, 2013, 2014 and 2015, which generated refunds of $1.9 million. The amended returns are under audit and as a result, the administrative processing of the carryback claims requires that the statute for tax years 2013 to 2015 remains open. On June 30, 2020, we filed a carryback claim for a refund for the tax year ended December 31, 2018 for $7.0 million. The requested refund was received on August 7, 2020. As our refund claim filed for the tax year 2018 exceeded $5 million, our 2018 federal return is under IRS under audit as required in order to receive Joint Committee approval for the refund. On November 3, 2020, we filed a carryback claim for refund for the tax year ended December 31, 2019 for $1.2 million, which has not yet been received. On December 4, 2020, we filed an amended federal return for the tax year ended December 31, 2018, in order to take full advantage of the CARES Act legislative changes. The changes reported in the amended return resulted in additional $2.3 million of loss. The additional losses generated from the amended filing will be administratively carried back and processed as part of the Joint Committee review of the 2018 carryback claim. The majority of the NOLs generated in tax years 2018 and 2019 are primarily the result of filing non-automatic accounting method changes relating to cemetery property and merchandise and services deferred revenue. These losses were carried back 5 years to tax years in which the enacted federal rate was 35%, under the CARES Act. On October 11, 2021, we received an adverse ruling from the IRS for the accounting method change filed in 2018 for revenue recognition of cemetery property. Approval is still pending for the accounting method change filed for revenue recognition of cemetery merchandise and services. Upon receiving the adverse ruling on the revenue recognition of cemetery property accounting method change, we filed an automatic method change on Form 3115, to adopt the IRS’ preferred revenue recognition method for cemetery property. The accounting method change application was submitted under the “three-month window” rule, which would grant audit protection for the cumulative effect of the adverse ruling for revenue recognition of cemetery property, at the discretion of the IRS agent conducting the audit. The tax effects of temporary differences from total operations that give rise to significant deferred tax assets and liabilities are as follows (in thousands):
| Years Ended December 31,
| 2020 |  | 2021
Deferred income tax assets: |  |  |
Net operating loss carryforwards | $ | 1,570 |  |  | $ | 1,268 |
Interest expense limitation | 18 |  |  | 2,777 |
Tax credit carryforwards | 100 |  |  | 88 |
State depreciation | 1,264 |  |  | 1,195 |
Accrued and other liabilities | 6,313 |  |  | 7,552 |
Amortization of non-compete agreements | 1,117 |  |  | 1,172 |
Prepaid and other assets | 741 |  |  | 616 |
Total deferred income tax assets | 11,123 |  |  | 14,668 |
Less valuation allowance | (222) |  |  | (198) |
Total deferred income tax assets | $ | 10,901 |  |  | $ | 14,470 |
Deferred income tax liabilities: |  |  |
Depreciation and amortization | $ | (50,946) |  |  | $ | (56,030) |
Preneed liabilities | (6,427) |  |  | (4,224) |
Convertible Notes | (5) |  |  | — |
Total deferred income tax liabilities | (57,378) |  |  | (60,254) |
Total net deferred tax liabilities | $ | (46,477) |  |  | $ | (45,784) |
Our deferred tax assets and liabilities, along with related valuation allowances, are classified as non-current on our Consolidated Balance Sheet at December 31, 2020 and 2021. 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 an immaterial net decrease in our valuation allowance during 2020 and 2021. For state reporting purposes, we have $24.4 million of net operating loss carryforwards that will expire between 2022 and 2041, 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 we will be able to realize tax benefits on some portion of the amount of the state losses. The valuation allowance at December 31, 2021 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 our Consolidated Balance Sheet. The deferred tax assets recognized for those NOLs are presented net of these unrecognized tax benefits. At December 31, 2021, the Company’s unrecognized tax benefits reserve for uncertain tax positions primarily relates to the uncertainty of receiving audit protection for revenue recognition of cemetery property and not yet receiving the IRS approval of the cemetery merchandise and services accounting method change filed in 2018. Our unrecognized tax benefit reserve for the years ended December 31, 2020 and 2021 was $3.7 million and $3.8 million, respectively. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands):
| Years Ended December 31,
| 2019 |  | 2020 |  | 2021
Unrecognized tax benefit at beginning of year | $ | — |  |  | $ | 691 |  |  | $ | 3,656 |
Gross increases - tax positions in prior period | 691 |  |  | — |  |  | — |
Gross decreases - tax positions in prior period | — |  |  | (691) |  |  | — |
Gross increases - tax positions in current period | — |  |  | 3,656 |  |  | 105 |
Unrecognized tax benefit at end of year | $ | 691 |  |  | $ | 3,656 |  |  | $ | 3,761 |
At December 31, 2021, we expect that the $3.8 million of unrecognized tax benefit will be recognized in the next twelve months. We recognize interest accrued related to unrecognized tax benefit as income tax expense. As of December 31, 2021, we accrued $0.1 million of interest related to the unrecognized tax benefit.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration