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Income Taxes
6 Months Ended
Jun. 30, 2017
Income Tax Disclosure [Abstract]  
Income Taxes
Income Taxes
The Company recorded an income tax provision inclusive of valuation allowance of $622 and $12,082 for the six months ended June 30, 2017 and 2016, respectively, reflecting a negative effective income tax rate of 23% for the six months ended June 30, 2017 and 47% for the six months ended June 30, 2016. For the six months ended June 30, 2017, the Company recorded a negative effective tax rate based on the Company’s taxable income projection for the full year 2017. For the six months ended June 30, 2017 and June 30, 2016, the Company calculated its income tax provision using the estimated annual effective tax rate methodology.
As of both June 30, 2017 and December 31, 2016, the Company had a net deferred tax liability of $61. The Company maintained a full valuation allowance against its U.S. net deferred tax assets as of both June 30, 2017 and December 31, 2016.
As of June 30, 2017, the Company had $1,154 of unrecognized tax benefits and it is reasonably possible that the entire amount could be realized by the Company in the year ending December 31, 2017, since the income tax returns may no longer be subject to audit in 2017.
From time to time, the Company is under audit by federal, state, and local tax authorities and the Company may be liable for additional tax obligations and may incur additional costs in defending any claims that may arise. The Company is currently under audit by the Internal Revenue Service for federal income tax returns for the years ended December 31, 2014 and 2015.
The following state and local jurisdictions are currently examining our respective returns for the years indicated: New York State (2010 through 2014), and New York City (2006 through 2014). In a revised letter dated December 12, 2016, the Company received from the State of New York a revised assessment related to tax years 2006-2009 for $4,722, inclusive of $2,044 of interest. The Company disagreed with the proposed assessment and attended a conciliation conference with the New York State Department of Taxation and Finance Audit section on June 7, 2017, and no settlement was reached. The Company has provided additional documents to support its case, and another conciliation conference will be scheduled once the conciliation conferee reviews the documents. The Company has not recorded a tax reserve related to the proposed assessment. It is difficult to predict the final outcome or timing of resolution of any particular matter regarding these examinations. An estimate of the reasonably possible change to unrecognized tax benefits within the next 12 months cannot be made.