(12) Income Taxes

The provision (benefit) for income taxes reflects current taxes, deferred taxes, and withholding taxes. The effective tax rates for the years ended December 31, 2016, 2015 and 2014 were 0%, 0% and (4)%, respectively. The Company continues to provide for a full valuation allowance to offset its net deferred tax assets until such time it is more likely than not the tax assets or portions thereof will be realized.

During 2015, the Company amended its 2012 federal tax return to carryback the tax loss generated in 2014 to offset the tax liability, which resulted in a tax refund of $1.3 million.

Components of tax provision (benefit) allocated to continuing operations include the following:

	Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,
	2016			2015			2014
Current:
Federal	$	—		$	(2	)	$	(3,378	)
State		(11	)		49			1
Foreign		21			19			5
Sub-total	$	10		$	66		$	(3,372	)
Deferred:
Federal	$	—		$	—		$	3,516
State		—			—			508
Foreign		—			—			—
Sub-total	$	—		$	—		$	4,024
Total tax provision (benefit)	$	10		$	66		$	652

The reconciliation of the statutory federal income tax rate to the Company’s effective income tax rate is as follows:

	Year Ended						Year Ended						Year Ended
	December 31,						December 31,						December 31,
	2016			%			2015			%			2014			%
Income taxes computed at statutory rates	$	(7,369	)		34	%	$	(6,081	)		34	%	$	(5,159	)		34	%
Increases (decreases) resulting from:
State income taxes, net of federal tax benefit		(1,219	)		6	%		(1,298	)		7	%		(700	)		5	%
Impact of federal graduated rates		-			0	%		(4	)		0	%		—			—
Federal and state research and experimentation credits		(1,112	)		5	%		(917	)		5	%		(563	)		4	%
Change in valuation allowance		9,468			(44	)%		8,132			(45	)%		6,916			(46	)%
Other		242			(1	)%		234			(1	)%		158			(1	)%
Total	$	10			0	%	$	66			0	%	$	652			(4	)%

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The tax effects of significant items comprising the Company’s deferred tax assets and deferred tax liabilities are as follows:

	Year Ended			Year Ended
	December 31,			December 31,
	2016			2015
Deferred tax assets:
Stock based compensation	$	1,524		$	1,751
Federal and state net operating losses		21,089			12,551
Goodwill		715			826
Accrued compensation		19			51
Deferred rent		344			62
Federal and state research and experimentation credit		3,434			2,322
AMT credit		92			92
Intangible asset differences		253			167
Other		39			74
Total gross deferred tax assets		27,509			17,896
Less valuation allowance		(24,888	)		(15,420	)
Net deferred tax assets	$	2,621		$	2,476
Deferred tax liabilities:
Patent expenditures	$	(2,012	)	$	(2,017	)
Fixed asset differences		(609	)		(459	)
Total gross deferred tax liabilities	$	(2,621	)	$	(2,476	)

Total net deferred tax assets	$	—		$	—

The Company had a valuation allowance of $24,888 and $15,420 on deferred tax assets as of December 31, 2016 and 2015, respectively, an increase of $9,468 during the year ended December 31, 2016.

As of December 31, 2016, the Company has federal and state net operating loss carry-forwards of $63,309 and $81,436, respectively, which have a carry-forward of 5 to 20 years depending on the jurisdiction. The gross deferred tax assets for federal and state net operating loss carryforwards acquired in the Attributor acquisition have been reduced to the amount of losses allowed to be utilized in the post-acquisition period before expiration after considering the applicable limitations of IRC Sec. 382.

As of December 31, 2016, the Company has federal and state research and experimental tax credits of $4,303 and $1,390, respectively, which have a carry-forward of 5 to 20 years depending on the jurisdiction.

The Company records accrued interest and penalties associated with uncertain tax positions in income tax expense in the consolidated statements of operations. For the years ended December 31, 2016, 2015 and 2014, the Company recognized accrued interest and penalties associated with uncertain tax positions of $0, $4 and $6, respectively. The Company does not anticipate any of its unrecognized benefits will significantly increase or decrease within the next 12 months.

A summary reconciliation of the Company’s uncertain tax positions is as follows:

	Year Ended			Year Ended		Year Ended
	December 31,			December 31,		December 31,
	2016			2015		2014
Beginning balance	$	425		$	306	$	219
Addition for current year tax positions		100			74		58
Addition for prior year tax positions		2			45		29
Reduction for prior year positions resolved during the current year		(41	)		—		—
Ending balance	$	486		$	425	$	306

Uncertain tax positions are classified as a long-term liability (or a contra deferred tax asset) on the consolidated balance sheets for uncertain tax positions taken (or expected to be taken) on a tax return.

The Company’s open tax years subject to examination in the U.S. federal jurisdiction are 2012 through 2015 and applicable state jurisdictions for the tax years 2012 through 2015. To the extent allowed by law, the taxing authorities may have the right to examine prior periods where net operating losses or tax credits were generated and carried forward, and make adjustments up to the amount of the net operating loss or tax credit carryforward.