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Income Taxes | 12 Months Ended
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Dec. 31, 2017
Income Tax Disclosure [Abstract] |
Income Taxes | INCOME TAXES We file income tax returns in the U.S. federal jurisdiction, as well as in various state and local jurisdictions. With few exceptions, we are no longer subject to U.S. federal, state, and local, or non-United States income tax examinations by tax authorities for years before 2014. Our practice is to recognize interest and penalties related to income tax matters in income tax expense when and if they become applicable. At December 31, 2017 and 2016, respectively, there were no accrued interest and penalties related to uncertain tax positions. The following table shows the components of (loss) income from continuing operations before income taxes (in thousands):
| For the year ended December 31,
| 2017 |  | 2016 |  | 2015
United States | $ | (11,382 | ) |  | $ | (16,848 | ) |  | $ | 9,620 |
(Loss) income from continuing operations before income taxes | $ | (11,382 | ) |  | $ | (16,848 | ) |  | $ | 9,620 |
The following table shows the components of the provision for income taxes from continuing operations (in thousands):
| For the year ended December 31,
| 2017 |  | 2016 |  | 2015
Current: |  |  |  |  |
U.S. federal | $ | — |  |  | $ | 1 |  |  | $ | 123 |
State | 10 |  |  | 26 |  |  | 26 |
Total current | $ | 10 |  |  | $ | 27 |  |  | $ | 149 |
Deferred: |  |  |  |  |
U.S. Federal | $ | (125 | ) |  | $ | — |  |  | $ | — |
State | $ | — |  |  | $ | — |  |  | $ | — |
Total deferred | $ | (125 | ) |  | $ | — |  |  | $ | — |
Provision for income taxes | $ | (115 | ) |  | $ | 27 |  |  | $ | 149 |
The principal items accounting for the difference between income taxes computed at the U.S. statutory rate and the provision for income taxes from continuing operations reflected in our Consolidated Statements of Operations are as follows:
| For the year ended December 31,
| 2017 |  | 2016 |  | 2015
U.S. statutory rate | 34.0 | % |  | 34.0 | % |  | 34.0 | %
State taxes (net of federal tax benefit) | 2.3 |  |  | 1.7 |  |  | 0.2 |
Valuation allowance | 17.4 |  |  | (27.5 | ) |  | (27.9 | )
Deferred rate change due to changes in tax laws | (51.7 | ) |  | — |  |  | — |
Other | (1.0 | ) |  | (8.4 | ) |  | (4.8 | )
| 1.0 | % |  | (0.2 | )% |  | 1.5 | %
The tax effects of temporary differences that give rise to significant portions of the deferred tax assets are as follows (in thousands):
| At December 31,
| 2017 |  | 2016 |  | 2015
Allowance for doubtful accounts | $ | — |  |  | $ | 18 |  |  | $ | 18 |
Accrued expenses and other reserves | 1,749 |  |  | 3,138 |  |  | 2,244 |
Tax credits, deferred R&D, and other | 197 |  |  | 142 |  |  | 122 |
Net operating loss | 8,610 |  |  | 9,239 |  |  | 5,384 |
Valuation allowance | (10,556 | ) |  | (12,537 | ) |  | (7,768 | )
Net deferred tax assets | $ | — |  |  | $ | — |  |  | $ | — |
In 2017, our effective tax rate was lower than the statutory rate due to the remeasurement of our deferred tax assets resulting from the Tax Cuts and Jobs Act of 2017 (the “Act”) and a decrease in the valuation allowance. In 2016, our effective tax rate was lower than the statutory rate due to an increase in the valuation allowance as a result of the $10.6 million additional federal net operating loss we recognized for the year. On December 22, 2017, the Act was signed into law making significant changes to the Internal Revenue Code (“IRC”). Changes include, but are not limited to, a corporate tax rate decrease from 35 percent to 21 percent effective for tax years beginning after December 31, 2017, repeal of the corporate Alternative Minimum Tax, elimination of certain deductions, and changes to the carryforward period and utilization of Net Operating Losses generated after December 31, 2017. We have calculated our best estimate of the impact of the Act in our year end income tax provision in accordance with our understanding of the Act and guidance available as of the date of this filing. As a result of the Act, we have recorded $0.1 million as additional income tax benefit in the fourth quarter of 2017, the period in which the legislation was enacted. The amount related to the release of the valuation allowance on the Alternative Minimum Tax Credit carry-forward which is expected to be fully refunded by 2021. We remeasured the deferred tax assets and liabilities, based on the rates at which they are expected to reverse in the future. The impact of the remeasurement was $5.9 million of additional tax expense which was offset by a $5.9 million reduction of the valuation allowance resulting in a net zero impact to the financial statements. The U.S. Treasury Department, the Internal Revenue Service, and other standard-setting bodies could interpret or issue guidance on how provisions of the Act will be applied or otherwise administered that is different from our interpretation. As we complete our analysis of the Act, collect and prepare necessary data, and interpret any additional guidance, we may make adjustments to provisional amounts that we have recorded that may materially impact our provision for income taxes in the period in which the adjustments are made. Since we believe it is more likely than not that the benefit from net operating loss carry-forwards will not be realized, we have provided a full valuation allowance against our deferred tax assets at December 31, 2017 and 2016, respectively. We had no net deferred tax liabilities at December 31, 2017 or 2016, respectively. In 2017, we recognized U.S. federal and various states income tax benefit of $0.1 million as a result of the reduction of the valuation allowance on the portion of Alternative Minimum Tax Credits that are expected to be refunded. In 2016, we recognized U.S. federal and various states income tax expense as a result of the adjustment from the 2015 provision to the actual tax on the 2015 returns that were filed in 2016. Deferred income tax assets are reduced by a valuation allowance when it is more likely than not that some portion of the deferred income tax assets will not be realized. In considering the need for a valuation allowance, we assess all evidence, both positive and negative, available to determine whether all or some portion of the deferred tax assets will not be realized. Such evidence includes, but is not limited to, recent earnings history, projections of future income or loss, reversal patterns of existing taxable and deductible temporary differences, and tax planning strategies. We will continue to evaluate the need for a valuation allowance on a quarterly basis. At December 31, 2017, we had net operating loss carry-forwards of approximately $91.8 million for U.S. federal, state, and local income tax purposes. However, due to changes in our capital structure, approximately $37.3 million of this amount is available to offset future taxable income after the application of the limitations found under Section 382 of the IRC. As a result of this limitation, in 2018, we expect to have approximately $37.3 million of the net operating loss carry-forward available for use. If not utilized, these carry-forwards will begin to expire in 2021 for federal purposes and have begun to expire for state and local purposes. Additionally, the changes to our capital structure have subjected, and will continue to subject our net operating loss carry-forward to an annual limitation as discussed further below. This limitation will significantly restrict our ability to utilize the carry-forward to offset taxable income in future periods. The IRC imposes restrictions on the utilization of various carry-forward tax attributes in the event of a change in ownership, as defined by IRC Section 382. During 2015, we completed an IRC Section 382 review and the results of this review indicate ownership changes have occurred which would cause a limitation on the utilization of carry-forward attributes. Our net operating loss carry-forwards and research and development credits are all subject to limitation. Under these tax provisions, the limitation is applied first to any capital losses, next to any net operating losses, and then to any general business credits. The Section 382 limitation is currently estimated to result in the expiration of $54.2 million of net operating loss carry-forwards and $0.3 million of research and development credits. A valuation allowance has been established to reserve for the potential benefits of the remaining net operating loss carry-forwards in the consolidated financial statements to reflect the uncertainty of future taxable income required to utilize available tax loss carry-forwards.

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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 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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