INCOME TAXES

The Company’s federal and state income tax provision (benefit) from continuing operations is summarized in the following table (in thousands):



	Year Ended December 31,
	2014			2013			2012
Current
Federal	$	(886	)	$	(866	)	$	(6,095	)
State	(41		)	(1,412		)	(990		)
Total current	(927		)	(2,278		)	(7,085		)
Deferred
Federal	9,951			4,424			97
State	2,367			377			(129		)
Total deferred	12,318			4,801			(32		)
Total tax provision (benefit)	$	11,391		$	2,523		$	(7,117	)

The effect of temporary differences that give rise to a significant portion of deferred taxes is as follows (in thousands):



	December 31,
	2014			2013
Deferred tax assets:
Reserves not currently deductible	$	28,424		$	9,785
Net operating loss carryforwards	65,097			39,265
Goodwill and intangibles (tax deductible)	8,499			7,556
Accrued expenses	38			—
Property basis differences	301			—
Stock based compensation	8,201			6,277
Other	610			417
Total deferred tax assets	111,170			63,300
Deferred tax liabilities:
Property basis differences	—			(496		)
Accrued expenses	—			(679		)
Indefinite-lived goodwill and intangibles	(21,272		)	(9,969		)
Less: valuation allowance	(111,170		)	(61,110		)
Net deferred tax liability	(21,272		)	(8,954		)
Less: Amount included in accrued expenses and other current liabilities	(2,214		)	(2,019		)
Deferred taxes	$	(19,058	)	$	(6,935	)

During the fourth quarter of 2010, the Company concluded that it was more likely than not that its deferred tax assets would not be realized. The Company continually assesses the necessity of a valuation allowance. Based on this assessment, the Company concluded that a valuation allowance, in the amount of $111.2 million and $61.1 million, was required as of December 31, 2014 and 2013, respectively. If the Company determines in a future period that it is more likely than not that part or all of the deferred tax assets will be realized, the Company will reverse part or all of the valuation allowance.

At December 31, 2014, the Company had federal net operating loss (“NOL”) carryforwards of approximately $174.9 million, of which $21.1 million is subject to an annual limitation, which will begin expiring in 2026 and later. Of the Company’s $174.9 million federal NOLs, $18.0 million will be recorded in additional paid-in capital when realized as these NOLs are related to the exercise of non-qualified stock options and restricted stock grants. The Company has post-apportioned state NOL carryforwards of approximately $245.7 million, the majority of which will begin expiring in 2017 and later.

The Company’s reconciliation of the statutory rate to the effective income tax rate from continuing operations is as follows (in thousands):



	Year Ended December 31,
	2014			2013			2012
Tax (benefit) provision at statutory rate	$	(46,197	)	$	(18,107	)	$	(6,788	)
State tax (benefit) provision, net of federal taxes	(3,704		)	(2,459		)	(901		)
Valuation allowance changes affecting income tax expense	61,227			23,762			1,077
Change in tax contingencies	(109		)	(1,157		)	(633		)
Non-deductible transaction costs	—			317			—
Other	174			167			128
Tax provision (benefit)	$	11,391		$	2,523		$	(7,117	)

As of December 31, 2014, the Company had $1.1 million of gross unrecognized tax benefits, of which $0.1 million, if recognized, would favorably affect the effective income tax rate in future periods. A reconciliation of the beginning and ending amount of gross unrecognized tax benefits is as follows (in thousands):



	Year Ended December 31,
	2014			2013			2012
Unrecognized tax benefits balance at January 1,	$	1,172		$	2,754		$	2,605
Gross increases for tax positions taken in current year	—			—			636
Lapse of statute of limitations	(76		)	(1,582		)	(487		)
Unrecognized tax benefits balance at December 31,	$	1,096		$	1,172		$	2,754

The Company’s policy for recording interest and penalties associated with uncertain tax positions is to record such items as a component of income tax expense in the Consolidated Statements of Operations. As of December 31, 2014 and 2013, the Company had approximately $0.1 million and $0.1 million of accrued interest related to uncertain tax positions, respectively.

The Company files income tax returns, including returns for its subsidiaries, with federal, state and local jurisdictions. The Company’s uncertain tax positions are related to tax years that remain subject to examination. As of December 31, 2014, U.S. tax returns for the years 2011 through 2014 remain subject to examination by federal tax authorities. Tax returns for the years 2010 through 2014 remain subject to examination by state and local tax authorities for a majority of the Company's state and local filings.