XML 29 R19.htm IDEA: XBRL DOCUMENT
v3.23.2

Contingent Liabilities | 6 Months Ended
--- | ---
Jun. 30, 2023
Commitments and Contingencies Disclosure [Abstract] |
Contingent Liabilities | Contingent Liabilities Litigation The Company is subject to various lawsuits and other claims in the normal course of business. In addition, from time to time, the Company receives communications from government or regulatory agencies concerning investigations or allegations of noncompliance with laws or regulations in jurisdictions in which the Company operates. The Company establishes reserves for the estimated losses on specific contingent liabilities for regulatory and legal actions where the Company deems a loss to be probable and the amount of the loss can be reasonably estimated. In other instances, losses are considered probable, but the Company is not able to make a reasonable estimate of the liability because of the uncertainties related to the outcome or the amount or range of potential loss. For these matters, disclosure is made when material, but no amount is reserved. The Company does not expect that the ultimate resolution of pending regulatory and legal matters in future periods will have a material adverse effect on the Company's consolidated statements of operations and comprehensive income (loss), balance sheets or cash flows. Section 199 and Research and Development Tax Case Section 199 of the Internal Revenue Code of 1986, as amended (the “Tax Code”), provides for deductions for manufacturing performed in the U.S. The Internal Revenue Service (“IRS”) has taken the position that directory providers are not entitled to take advantage of the deductions because printing vendors are already taking deductions and only one taxpayer can claim the deduction. The Tax Code also grants tax credits related to research and development expenditures. The IRS also takes the position that the expenditures have not been sufficiently documented to be eligible for the tax credit. The Company disagrees with these positions. The IRS has challenged the Company's positions. With respect to the tax years 2012 through June 2015 for the YP LLC partnership, the IRS sent 90-day notices to DexYP on August 29, 2018. In response, the Company filed three petitions (in the names of various related partners) in U.S. Tax Court, and the IRS filed answers to those petitions. The three cases were consolidated by the court and were referred back to IRS Administrative Appeals for settlement negotiations, during which time the litigation was suspended. The appeals c onference for YP occurred on May 9, 2022. The Company is working through ongoing settlement negotiations with the Appeals Officer. In advance of the IRS Appeals conference, the parties reached an agreement regarding additional research and development tax credits for the tax years at issue whereby the IRS will allow more tax credits than were originally claimed on the tax returns. With respect to the tax year from July to December 2015 for the Print Media LLC partnership, the Company was unsuccessful in its attempt to negotiate a settlement with IRS Administrative Appeals, and the IRS issued a 90-day notice to the Company. The Company filed a petition in the U.S. Tax Court on March 30, 2021 to challenge the IRS denial. As of June 30, 2023 and December 31, 2022, the Company has reserved approximately $25.1 million and $34.0 million, respectively, in connection with the Section 199 disallowance and less than $0.1 million related to the research and development tax credit disallowance. Pursuant to the YP Acquisition agreement, the Company is entitled to (i) a dollar-for-dollar indemnification for the research and development tax liability, and (ii) a dollar-for-dollar indemnification for the Section 199-tax liability after the Company pays the first $8.0 million in liability. The indemnification asset, however, is subject to a provision in the YP Acquisition agreement that limits the seller’s liability. The indemnification asset balance was $26.5 million as of December 31, 2022. The indemnification asset was settled with the seller as of June 30, 2023. See Note 4, Fair Value Measurements. On May 22, 2023, the Company received a draft Appeals Settlement document (“Draft Settlement”) from the IRS relating to the IRC Section 199 tax case described in Note 15 Contingent Liabilities of our Form 10-K for year ended December 31, 2022. Once finalized, the Draft Settlement will result in a decrease in the unrecognized tax benefit recorded for this tax position. As a result of this new information received from the Draft Settlement provided by the IRS, we recorded a remeasurement adjustment to the related Uncertain Tax Position liability of $8.9 million for the six months ended June 30, 2023. The same adjustment will be reflected to the Uncertain Tax Position for the case for Print Media LLC as YP LLP given the same facts and anticipated results from tax court. The Company is in continued discussion with the IRS regarding the finalization of this case and final tax impact that will result. Accordingly, we do not consider the matter effectively settled as of this quarter.

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

X
- Definition The entire disclosure for legal proceedings, legal contingencies, litigation, regulatory and environmental matters and other contingencies. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 450 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//450/tableOfContent + Details
Name: | us-gaap_LegalMattersAndContingenciesTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration