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Income Taxes | 12 Months Ended
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Dec. 31, 2014
Income Tax Disclosure [Abstract] |
Income Taxes | Note 21 — Income Taxes For income tax purposes, the components of income (loss) before taxes were as follows for the years ended December 31:
| 2014 |  | 2013 |  | 2012
Domestic | $ | (401,741 | ) |  | $ | 76,957 |  |  | $ | 176,075 |
Foreign | (41,418 | ) |  | 275,522 |  |  | 81,433 |
| $ | (443,159 | ) |  | $ | 352,479 |  |  | $ | 257,508 |
The components of income tax expense (benefit) were as follows for the years ended December 31:
| 2014 |  | 2013 |  | 2012
Current: |  |  |  |  |  |  |  |
Federal | $ | (20,824 | ) |  | $ | 58,507 |  |  | $ | 10,621 |
State | (403 | ) |  | 14,691 |  |  | (759 | )
Foreign | 9,195 |  |  | 15,545 |  |  | 2,968 |
| (12,032 | ) |  | 88,743 |  |  | 12,830 |
Deferred: |  |  |  |  |  |  |  |
Federal | 41,986 |  |  | (53,711 | ) |  | 62,704 |
State | (997 | ) |  | (4,325 | ) |  | (431 | )
Foreign | (6,162 | ) |  | (4,410 | ) |  | 1,482 |
Provision for valuation allowance on deferred tax assets | 3,601 |  |  | 15,764 |  |  | — |
| 38,428 |  |  | (46,682 | ) |  | 63,755 |
Total | $ | 26,396 |  |  | $ | 42,061 |  |  | $ | 76,585 |
Income tax expense differs from the amounts computed by applying the U.S. Federal corporate income tax rate of 35% as follows for the years ended December 31:
| 2014 |  | 2013 |  | 2012
Expected income tax expense at statutory rate | $ | (155,106 | ) |  | $ | 123,368 |  |  | $ | 90,127 |
Differences between expected and actual income tax expense: |  |  |  |  |  |  |  |
Impairment of goodwill | 92,034 |  |  | — |  |  | — |
State tax, after Federal tax benefit | (1,084 | ) |  | 5,639 |  |  | (1,184 | )
Provision for liability for selected tax items | 6,084 |  |  | 12,218 |  |  | 5,558 |
Non-deductible regulatory settlements | 53,375 |  |  | — |  |  | — |
Other permanent differences | (254 | ) |  | (636 | ) |  | 15 |
Foreign tax differential | 27,799 |  |  | (112,997 | ) |  | (17,816 | )
Provision for valuation allowance on deferred tax assets | 3,601 |  |  | 15,764 |  |  | — |
Other | (53 | ) |  | (1,295 | ) |  | (115 | )
Actual income tax expense | $ | 26,396 |  |  | $ | 42,061 |  |  | $ | 76,585 |
Net deferred tax assets were comprised of the following at December 31:
| 2014 |  | 2013
Deferred tax assets: |  |  |  |  |
Net operating loss carryforward | $ | 35,433 |  |  | $ | 35,370 |
Bad debt and allowance for loan losses | 10,727 |  |  | 6,397 |
Partnership losses | 10,663 |  |  | 11,085 |
Intangible asset amortization | 10,741 |  |  | 4,728 |
Accrued legal settlements | 7,403 |  |  | 27,320 |
Reserve for servicing exposure | 7,093 |  |  | 20,446 |
Accrued other liabilities | 6,271 |  |  | 7,452 |
Accrued incentive compensation | 5,029 |  |  | 10,037 |
Tax residuals and deferred income on tax residuals | 4,021 |  |  | 3,963 |
Delinquent servicing fees | 3,591 |  |  | 36,480 |
Stock-based compensation expense | 3,431 |  |  | 2,956 |
Foreign deferred assets | 2,568 |  |  | 2,802 |
Accrued lease termination costs | 1,831 |  |  | 1,085 |
Capital losses | 1,464 |  |  | 843 |
Valuation allowance on real estate | 1,007 |  |  | 767 |
Interest rate swaps | 494 |  |  | 743 |
Other | 5,606 |  |  | 10,560 |
| 117,373 |  |  | 183,034 |
Deferred tax liabilities: |  |  |  |  |
Mortgage servicing rights amortization | 14,696 |  |  | 51,619 |
Foreign undistributed earnings | 6,249 |  |  | — |
Other | 76 |  |  | 80 |
| 21,021 |  |  | 51,699 |
| 96,352 |  |  | 131,335 |
Valuation allowance | (19,365 | ) |  | (15,764 | )
Deferred tax assets, net | $ | 76,987 |  |  | $ | 115,571 |
We conduct periodic evaluations of positive and negative evidence to determine whether it is more likely than not that the deferred tax asset can be realized in future periods. Among the factors considered in this evaluation are estimates of future taxable income, future reversals of temporary differences, tax character and the impact of tax planning strategies that may be implemented, if warranted. As a result of this evaluation, we concluded that a valuation allowance of $19.4 million and $15.8 million was necessary at December 31, 2014 and 2013, respectively. We recognized total interest and penalties of $2.3 million, $2.0 million and $(0.1) million in 2014, 2013 and 2012, respectively. At December 31, 2014 and 2013, accruals for interest and penalties were $5.9 million and $3.6 million, respectively. As of December 31, 2014 and 2013, we had a liability for selected tax items of $22.5 million and $23.7 million, respectively, all of which if recognized would affect the effective tax rate. It is reasonably possible that there could be a change in the amount of our unrecognized tax benefits within the next 12 months due to activities of the Internal Revenue Service or other taxing authorities, including proposed assessments of additional tax, possible settlement of audit issues, or the expiration of applicable statutes of limitations. The range of the possible change in unrecognized tax benefits within the next 12 months cannot be reasonably estimated at December 31, 2014. However, we do not expect that change to have a material impact on our financial position or results of operations. Our major jurisdiction tax years that remain subject to examination are our U.S. federal tax return for the years ended December 31, 2008 through the present, our USVI corporate tax return for the years ended December 31, 2012 through the present and our India corporate tax returns for the years ended March 31, 2005 through the present. Our U.S. federal tax return for the years ended December 31, 2008, 2009, 2010 and 2012 are currently under examination. In addition, the U.S. federal tax return filed by our USVI subsidiary for the year ended December 31, 2012 is currently under examination. A reconciliation of the beginning and ending amount of the total liability for selected tax items is as follows for the years ended December 31:
| 2014 |  | 2013
Beginning balance | $ | 27,273 |  |  | $ | 22,702 |
Additions for tax positions of prior years | 1,392 |  |  | 4,944 |
Reductions for tax positions of prior years | (6,010 | ) |  | — |
Lapses in statute of limitations | (132 | ) |  | (373 | )
Ending balance | $ | 22,523 |  |  | $ | 27,273 |
At December 31, 2014, we had U.S. NOL carryforwards of $100.4 million. These carryforwards will expire beginning 2019 through 2034. We believe that it is more likely than not that the benefit from certain federal NOL carryforwards will not be realized. In recognition of this risk, we have provided a valuation allowance of $19.1 million on the deferred tax assets relating to these federal NOL carryforwards. If our assumptions change and we determine we will be able to realize these NOLs, the tax benefits relating to any reversal of the valuation allowance on deferred tax assets as of December 31, 2014 will be accounted for as a reduction of income tax expense. We have capital loss carryforwards of $23.0 million at December 31, 2014. As of December 31, 2014, we have recognized a deferred tax liability of $6.2 million for India, Mauritius and Luxembourg subsidiary undistributed earnings of $31.9 million. We anticipate repatriating the $31.9 million of earnings in 2015. With the exception of the planned repatriation of India, Mauritius, and Luxembourg subsidiary earnings, we consider the remainder of our foreign subsidiary undistributed earnings to be indefinitely invested outside the U.S. based on our specific plans for reinvestment. As of December 31, 2014, our foreign subsidiaries have approximately $327.0 million of undistributed earnings and $112.9 million of cash and short term investments. Should we decide to repatriate the foreign earnings, we would need to adjust our income tax provision in the period we determined that the earnings will no longer be indefinitely reinvested. Determination of the amount of unrecognized deferred tax liability is not practicable. OMS is headquartered in Frederiksted, St. Croix, USVI and is located in a federally recognized economic development zone where qualified entities are eligible for certain benefits. We refer to these benefits as “EDC benefits” as they are granted by the USVI Economic Development Commission. We were approved as a Category IIA service business, and are therefore entitled to receive benefits that have a favorable impact on our effective tax rate. These benefits, among others, enable us to avail ourselves of a credit of 90% of income taxes on certain qualified income related to our servicing business. The exemption was granted as of October 1, 2012 and is available for a period of 30 years until expiration on September 30, 2042. The impact of these EDC benefits decreased foreign taxes by $61.2 million and $109.1 million for 2014 and 2013, respectively. The benefit of these EDC benefits on diluted earnings per share was $0.47 and $0.78 for 2014 and 2013, respectively.

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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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