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Income Taxes
9 Months Ended
Mar. 31, 2020
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The income tax expense we record in any interim period is based on our estimated effective tax rate for the fiscal year for those tax jurisdictions in which we can reliably estimate that rate. The calculation of our estimated effective tax rate requires an estimate of pre-tax income by tax jurisdiction as well as total tax expense for the fiscal year. Accordingly, our annual estimated effective tax rate is subject to adjustment if there are changes to our initial estimates of total tax expense or pre-tax income, including the mix of income by jurisdiction. For those tax jurisdictions for which we are unable to reliably estimate an overall effective tax rate, we calculate income tax expense based upon the actual effective tax rate for the year-to-date period.
Provision for Income Taxes
On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was enacted in the U.S. in response to the COVID-19 pandemic. The CARES Act, among other things, includes a technical amendment to provide for bonus depreciation on certain qualifying assets. The CARES Act also provides for the ability to accelerate the refund of remaining alternative minimum tax credits, which will allow us to immediately request an additional $0.3 million in refunds that otherwise would have been received over the course of the next three years.
We recorded income tax expense of $6.1 million and an income tax benefit of $1.3 million for the three months ended March 31, 2020 and 2019, respectively. In the three months ended March 31, 2020, income tax expense was attributable to our U.S., UK and Switzerland operations, offset in part by a tax benefit recorded against operating losses in Israel, discrete tax benefits of $0.5 million relating to stock-based compensation and a discrete tax benefit of $0.3 million in the U.S. as a result of the bonus depreciation under the CARES Act as discussed above. The income tax benefit for the three months ended March 31, 2019 was driven largely by discrete tax benefits of $0.8 million relating to stock-based compensation.
We recorded income tax expense of $2.3 million and an income tax benefit of $6.1 million for the nine months ended March 31, 2020 and 2019, respectively. In the nine months ended March 31, 2020, income tax expense was attributable to our UK and Switzerland operations, offset in part by a tax benefit recorded against operating losses in Israel, discrete tax benefits of $1.1 million relating to stock-based compensation, and a discrete tax benefit of $0.3 million in the U.S. as a result of the CARES Act discussed above. In the nine months ended March 31, 2019, the income tax benefit we recorded was driven largely by discrete tax benefits of $5.4 million relating to stock-based compensation and a discrete tax benefit of $0.5 million arising from a reduction to deferred tax liabilities related to state tax consequences of repatriated foreign earnings.
We currently anticipate that our unrecognized tax benefits will decrease within the next twelve months by approximately $0.4 million as a result of the expiration of certain statutes of limitations associated with intercompany transactions subject to tax in multiple jurisdictions.
We record a deferred tax asset if we believe that it is more likely than not that we will realize a future tax benefit. Ultimate realization of any deferred tax asset is dependent on our ability to generate sufficient future taxable income in the appropriate tax jurisdiction before the expiration of carryforward periods, if any. Our assessment of deferred tax asset recoverability considers
many different factors including historical and projected operating results, the reversal of existing deferred tax liabilities that provide a source of future taxable income, the impact of current tax planning strategies and the availability of future tax planning strategies. We establish a valuation allowance against any deferred tax asset for which we are unable to conclude that recoverability is more likely than not.
At March 31, 2020, we had a total valuation allowance of $34.7 million against our deferred tax assets given the uncertainty of recoverability of these amounts.