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Income Taxes | 3 Months Ended
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Mar. 31, 2020
Income Tax Disclosure [Abstract] |
Income Taxes |
9. | INCOME TAXES
Income taxes are recognized for the amount of taxes payable or refundable for the current year and deferred tax liabilities and assets for the future tax consequences of events that have been recognized in our consolidated financial statements or tax returns. The effects of income taxes are measured based on enacted tax laws and rates. In the first quarter of 2020, pretax income totaled $10.0 million and the provision for income taxes totaled $2.6 million. The effective income tax rate for the first quarter of 2020 benefited by $2.6 million recorded in connection with passage of the Coronavirus Aid, Relief, and Economic Security Act (“CARES”) of 2020. This Act, which was signed into law on March 27, 2020, modified the net operating loss (“NOL”) provisions of previous law to allow losses arising in a taxable year beginning after December 31, 2017 and before January 1, 2021, to be carried back five years. We are in the process of evaluating additional tax planning opportunities which may allow us to carry back additional NOLs. For the three months ended March 31, 2020, we recorded a decrease in our valuation allowance of $4.0 million against our net deferred tax assets in connection with passage of the CARES Act and the ability to carry our “net operating loss” back five years. In assessing the need for a valuation allowance, management considers all available positive and negative evidence in its analysis. Based on this analysis, we recorded a valuation allowance for the portion of deferred tax assets where the weight of the evidence indicated it is more likely than not that the deferred assets will not be realized. As of March 31, 2020 and December 31, 2019, we had $32.7 million and $30.5 million of gross unrecognized tax benefits. As of March 31, 2020, if such benefits were to be recognized, approximately $21.9 million would be recorded as a component of income tax expense, thereby affecting our effective tax rate. We, or one of our subsidiaries, file income tax returns with the United States Internal Revenue Service, as well as various state and foreign authorities. The following table summarizes, by major jurisdiction, tax years that remain subject to examination:
| Open Tax Years
Jurisdiction | Examinations not yet initiated |  |  | Examination in progress
United States |  |  |  |
Federal | 2016 - 2019 |  |  | N/A
State | 2015 - 2019 |  |  | 2015 - 2018
Canada(1) | 2012 - 2019 |  |  | N/A
Germany(1) | 2016 - 2019 |  |  | N/A
France | 2018 - 2019 |  |  | N/A
United Kingdom | 2018 - 2019 |  |  | N/A
Philippines | 2019 |  |  | 2016 - 2018
(1) | includes provincial or similar local jurisdictions, as applicable
The amount of income taxes we pay is subject to ongoing audits by federal, state and foreign tax authorities, which often result in proposed assessments. Management performs a comprehensive review of its global tax positions on a quarterly basis and accrues amounts for uncertain tax positions. Based on these reviews and the result of discussions and resolutions of matters with certain tax authorities and the closure of tax years subject to tax audit, reserves are adjusted as necessary. However, future results may include favorable or unfavorable adjustments to our estimated tax liabilities in the period the assessments are determined or resolved or as such statutes are closed. Due to potential for resolution of federal, state and foreign examinations, and the lapse of various statutes of limitation, it is reasonably possible our gross unrecognized tax benefits balance may decrease within the next twelve months by a range of zero to $1.2 million. Substantially all this range relates to tax positions taken in Canada and the U.S. We recognize interest and penalties related to uncertain tax positions as income tax expense. The following table summarizes information included in continuing operations related to interest on uncertain tax positions:
| Three months ended March 31 |
In millions | 2020 |  |  |  | 2019 |
Interest expense (income) | $ | 0.1 |  |  |  | $ | 0.1 |
| March 31 |  |  |  | December 31 |
| 2020 |  |  |  | 2019 |
Accrued interest payable | $ | 0.5 |  |  |  | $ | 0.4 |

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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