Quarterly report pursuant to Section 13 or 15(d)

INCOME TAXES

v3.8.0.1
INCOME TAXES
9 Months Ended
Sep. 30, 2017
Income Tax Disclosure [Abstract]  
INCOME TAXES
INCOME TAXES

The Company utilizes the asset and liability approach to measuring deferred tax assets and liabilities based on temporary differences existing at each balance sheet date using currently enacted tax rates.  A valuation allowance for the Company’s deferred tax assets is established if, in management’s opinion, it is more likely than not that a valuation allowance is needed, looking at both positive and negative factors.  At September 30, 2017, a valuation allowance of $335.6 million had been provided for our net deferred tax assets based on the uncertainty regarding whether these assets may be realized.  Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

The income tax provision (benefit) for the three and nine months ended September 30, 2017 and 2016 consists of the following:

 
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
 
2017
 
2016
 
2017
 
2016
Current Income Tax Provision (Benefit)
$

 
$

 
$

 
$

Deferred Income Tax Provision (Benefit)
 

 
 

 
 

 
 

Federal
(5,461,000
)
 
(16,252,000
)
 
5,188,000

 
(95,001,000
)
State
(492,000
)
 
(1,466,000
)
 
468,000

 
(9,005,000
)
Valuation Allowance
5,953,000

 
17,718,000

 
(5,656,000
)
 
104,006,000

Total Income Tax Provision (Benefit)
$

 
$

 
$

 
$


Income tax provision (benefit) during interim periods is based on applying an estimated annual effective income tax rate to year-to-date income (loss), plus any unusual or infrequently occurring items that are recorded in the interim period.  The provision for the three and nine month periods ended September 30, 2017, presented above, differ from the amount that would be provided by applying the statutory U.S. federal income tax rate of 35% to income before income taxes.  The lower effective tax rate in 2017 and 2016 relates to the valuation allowance placed on the net deferred tax assets in the second quarter of 2015, in addition to state income taxes and estimated permanent differences.

Tax benefits are recognized only for tax positions that are more likely than not to be sustained upon examination by tax authorities.  The amount recognized is measured as the largest amount of benefit that is greater than 50 percent likely to be realized upon ultimate settlement.  Unrecognized tax benefits are tax benefits claimed in the Company’s tax returns that do not meet these recognition and measurement standards.

The Company has no liabilities for unrecognized tax benefits.

The Company’s policy is to recognize potential interest and penalties accrued related to unrecognized tax benefits within income tax expense.  For the nine months ended September 30, 2017 and 2016, the Company did not recognize any interest or penalties in its condensed statements of operations, nor did it have any interest or penalties accrued in its condensed balance sheet at September 30, 2017 and December 31, 2016 relating to unrecognized benefits.

The tax years 2016, 2015, and 2014 remain open to examination for federal income tax purposes and tax years 2016, 2015, 2014, 2013, 2012, 2011 and 2010 by the other major taxing jurisdictions to which the Company is subject.