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Income Taxes
 12 Months Ended
Dec. 31, 2022
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
Income from continuing operations before income taxes for the years ended December 31, 2022, 2021 and 2020 was as follows (in thousands):
 Years Ended December 31,
 2022 2021 2020
Domestic$7,772 $80,655 $49,673 
Foreign91,141 80,429 102,783 
Income before income taxes$98,913 $161,084 $152,456 

Income tax expense (benefit) related to continuing operations consisted of the following (in thousands):
 Years Ended December 31,
 2022 2021 2020
Current:  
Federal$13,327  $22,368  $5,831 
State1,941  1,445  923 
Foreign12,669  9,496  17,756 
Total current27,937  33,309  24,510 
 
Deferred:     
Federal(5,851) (4,902) (151)
State(1,359) 3,575  762 
Foreign5,472  7,928  4,922 
Total deferred(1,738) 6,601  5,533 
Income tax expense$26,199  $39,910  $30,043 
A reconciliation of the statutory federal income tax rate with Consensus’ effective income tax rate is as follows:
 Years Ended December 31,
 202220212020
Statutory tax rate21 %21 %21 %
State income taxes, net1.2 2.9 0.9 
Foreign rate differential(1.8)(0.1)(2.8)
Foreign income inclusion6.3 4.9 4.3 
Foreign tax credit(3.6)(4.0)(3.5)
Reserve for uncertain tax positions2.1 0.5 0.1 
Impact on deferred taxes of enacted tax law and rate changes0.1 — — 
Tax credits and incentives(2.4)(0.1)(0.1)
Executive compensation3.1 0.2 — 
Return to provision adjustments0.8 — 1.3 
Other(0.3)(0.5)(1.4)
Effective tax rates26.5 %24.8 %19.8 %

The effective tax rate for the year ended December 31, 2022 differs from the federal statutory rate primarily due to the Global Intangible Low-Taxes Income inclusion, impact of jurisdictional mix of earnings, an increase in the net reserve for uncertain tax positions during 2022, various tax credits and certain expenses not deductible for tax purposes, such as, non-deductible executive compensation.

The effective tax rate for the year ended December 31, 2021 differs from the federal statutory rate primarily due to impacts of the Global Intangible Low-Taxed Income inclusion, an increase in the reserve for uncertain tax positions during 2021 and various tax credits.

The effective tax rate for the year ended December 31, 2020 differs from the federal statutory rate primarily due to the Global Intangible Low-Taxes income inclusion, impact of jurisdictional mix of earnings and various tax credits.
Deferred tax assets and liabilities result from differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities. Temporary differences and carryforwards which give rise to deferred tax assets and liabilities are as follows (in thousands):
 Years Ended December 31,
 20222021
Deferred tax assets:
Net operating loss carryforwards$44 $48 
Tax credit carryforwards503 173 
Accrued expenses3,586 2,669 
Allowance for bad debt1,414 860 
Share-based compensation expense611 245 
Basis difference in intangibles20,056 30,887 
Basis difference in developed software1,089 — 
Deferred revenue425 — 
Operating lease4,269 4,196 
State taxes187 135 
Section 163(j) interest limitation5,521 1,144 
Other974 1,530 
 $38,679 $41,887 
Less: valuation allowance(45)(45)
Total deferred tax assets$38,634 $41,842 
  
Deferred tax liabilities: 
Basis difference in property and equipment$(487)$(3,304)
ROU asset(1,987)(1,773)
Prepaid insurance(907)(312)
Other— (638)
Total deferred tax liabilities$(3,381)$(6,027)
Net deferred tax assets$35,253 $35,815 

The Company had approximately $35.3 million and $35.8 million in net deferred tax assets as of December 31, 2022 and 2021, respectively, related primarily to basis differences in tangible and intangible assets. Based on the weight of available evidence, the Company assesses whether it is more likely than not that some portion or all of a deferred tax asset will not be realized. If necessary, the Company records a valuation allowance sufficient to reduce the deferred tax asset to the amount that is more likely than not to be realized. As of December 31, 2022 and 2021, the Company has a minimal amount of valuation allowance against its deferred tax assets of foreign net operating losses.

As of December 31, 2022 and 2021, the Company has interest expense limitation carryovers of $23.4 million and $4.9 million, respectively, which carries forward indefinitely.

As of December 31, 2022 and 2021, the Company had $0.5 million and $0.2 million foreign tax credit carryforward, respectively. If unused, these credits expire between 2031 and 2032.

In addition, as of December 31, 2022 and 2021, the Company had state research and development tax credits of $1.0 million and $0.1 million, respectively, which can be carried forward indefinitely.

Federal and state laws can impose substantial restrictions on the utilization of tax credit carry-forwards in the event of an “ownership change,” as defined in Section 382 of the Internal Revenue Code. The Company has determined that no significant limitation would be placed on the utilization of its tax credit carry-forwards due to ownership changes.
The Company has not provided deferred taxes on approximately $330.9 million of undistributed earnings from foreign subsidiaries as of December 31, 2022. The Company has not provided any additional deferred taxes with respect to items such as foreign withholding taxes, state income tax or foreign exchange gain or loss that would be due when cash is actually repatriated to the U.S. because those foreign earnings are considered permanently reinvested in the business or may be remitted substantially free of any additional taxes. Because of the various avenues in which to repatriate the earnings, it is not practicable to determine the amount of the unrecognized deferred tax liability related to the undistributed earnings if eventually remitted.

Certain tax payments are prepaid during the year and included within prepaid expenses and other current assets on the Consolidated Balance Sheets. The Company’s prepaid tax payments were $8.0 million and zero at December 31, 2022 and 2021, respectively.

Uncertain Income Tax Positions
Tax positions are evaluated in a two-step process. The Company first determines whether it is more likely than not that a tax position will be sustained upon examination. If a tax position meets the more-likely-than-not recognition threshold, it is then measured to determine the amount of benefit to recognize in the financial statements. The tax position is measured as the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. The Company classifies gross interest and penalties and unrecognized tax benefits that are not expected to result in payment or receipt of cash within one year as non-current liabilities in the Consolidated Balance Sheets.

As of December 31, 2022, the total amount of unrecognized tax benefits, excluding interest and penalties, was $5.7 million, of which $5.7 million, if recognized, would affect the Company’s effective tax rate. As of December 31, 2021, the total amount of unrecognized tax benefits, excluding interest and penalties, was $3.7 million, of which $3.7 million, if recognized, would affect the Company’s effective tax rate. As of December 31, 2020, the total amount of unrecognized tax benefits, excluding interest and penalties, was $3.1 million, of which $3.1 million, if recognized would affect the Company’s effective tax rate.

The aggregated changes in the balance of unrecognized tax benefits, which excludes interest and penalties, for 2022, 2021 and 2020, is as follows (in thousands):
Years Ended December 31,
202220212020
Beginning balance $3,735 $3,050 $3,015 
Decreases related to tax positions taken during a prior year(863)— — 
Increases related to tax positions taken in the current year2,870 685 35 
Decreases related to expiration of statute of limitations— — — 
Ending balance$5,742 $3,735 $3,050 

The Company includes interest and penalties related to unrecognized tax benefits within the provision for income taxes. As of December 31, 2022, 2021 and 2020, the total amount of interest and penalties accrued was $1.0 million, $1.0 million and $0.9 million, respectively, which is classified as a liability for uncertain tax positions on the Consolidated Balance Sheets. In connection with tax matters, the Company recognized interest and penalty expense in 2022, 2021 and 2020 of $0.1 million, $0.2 million and $0.2 million, respectively.

Uncertain income tax positions are reasonably possible to significantly change during the next 12 months as a result of completion of income tax audits and expiration of statutes of limitations. At this point it is not possible to provide an estimate of the amount, if any, of significant changes in reserves for uncertain income tax positions as a result of the completion of income tax audits that are reasonably possible to occur in the next 12 months. In addition, the Company cannot currently estimate the amount of, if any, uncertain income tax positions which will be released in the next 12 months as a result of expiration of statutes of limitations.
The Company files tax returns in the U.S., Ireland, Netherlands, France, Canada, Japan and Hong Kong. As of December 31, 2022, the Company is not under audit in any jurisdiction that it operates within. The Company has recently filed its first set of post-spin tax returns including some international subsidiaries who have previously filed in their local jurisdictions. In respect to these international subsidiaries, tax returns filed for the years from 2016 onwards are still open to examination by tax authorities.