INCOME TAXES

6 Months Ended

Jun. 30, 2022

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

Provision for (benefit from) income taxes the three and six months ended June 30, 2022 and 2021 consisted of the following (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2022			2021			2022			2021
Income (loss) before benefit from (provision for) income taxes	$	(1,993)		$	5,847		$	3,644		$	8,024
Benefit from (provision for) income taxes	174			(506)			(387)			(647)
Effective tax rate	(8.7)		%	(8.7)		%	(10.6)		%	(8.1)		%

Benefit from (provision for) income taxes for the three months ended June 30, 2022 and 2021 resulted primarily from estimated foreign taxes included in the calculation of the effective tax rate. Provision for income taxes for the six months ended June 30, 2022 and 2021 resulted primarily from estimated foreign taxes included in the calculation of the effective tax rate. We continue to maintain a full valuation allowance against all of our federal and state deferred tax assets in the United States as well as federal tax assets in Canada.

As of June 30, 2022, we had unrecognized tax benefits under ASC 740 Income Taxes of approximately $6.3 million and applicable interest of $0.1 million. The total amount of unrecognized tax benefits that would affect our effective tax rate, if

recognized, is $1.3 million. Our policy is to account for interest and penalties related to uncertain tax positions as a component of income tax provision. We do not expect to have any significant changes to unrecognized tax benefits during the next twelve months.

As of June 30, 2022, we had net deferred income tax assets of $2.0 million and deferred income tax liabilities of $0.2 million. Because we have net operating loss and credit carryforwards, there are open statutes of limitations in which federal, state, and foreign taxing authorities may examine our tax returns for all years from 2002 through the current period. The examination by the Internal Revenue Services for tax year 2018 was completed in this quarter without any change.

We maintain a valuation allowance against certain of our deferred tax assets, including all federal, state, and certain foreign deferred tax assets because of uncertainties regarding the realization of the asset balance due to historical losses, the variability of operating results, and uncertainty regarding near term projected results. If we determine the deferred tax assets are realizable based on our assessment of relevant factors, an adjustment to the valuation allowance may increase income in the period such determination is made.