8. Income Taxes

The (benefit) provision for income taxes is as follows for the three and six months ended June 30, 2013 and 2012 (in thousands):


	Three Months Ended June 30,					Six Months Ended June 30,
	2013		2012			2013		2012
Current:
Federal	$	99	$	(2,373	)	$	289	$	(4,513	)
State		—		—			—		—

Total current		99		(2,373	)		289		(4,513	)

Deferred:
Federal		—		1,785			—		3,317
State		—		—			—		—

Total deferred		—		1,785			—		3,317

Total	$	99	$	(588	)	$	289	$	(1,196	)

During the three months ended June 30, 2013 and 2012 and the six months ended June 30, 2013 and 2012, the Company had $99,000, $164,000, $289,000 and $202,000 accrued for interest and penalties related to the non-payment of U.S. federal income taxes, respectively.

As required by ASC 740, Income Taxes (“ASC 740”), management of the Company has evaluated the positive and negative evidence bearing upon the realizability of its deferred tax assets, which are comprised principally of timing differences related to the recognition of revenue under the Celgene Agreement for book versus tax purposes. During the year ended December 31, 2011, management determined that it was more likely than not that it would realize a portion of its deferred tax assets because of the Company’s ability to carryback future losses for U.S. federal income tax purposes. As a result, the Company reversed approximately $10.7 million of the valuation allowance on its deferred tax assets in the year ended December 31, 2011, representing the amount of deferred tax assets that will be realized in 2012 and 2013, the years available for carryback. The Company utilized certain of the deferred tax assets, including net operating losses, generated in the year ended December 31, 2012 to reduce its federal income taxes payable in the year ended December 31, 2012. The provision for income taxes for the three and six months ended June 30, 2013 was attributable to penalties and interest accrued for the non-payment of U.S. federal income taxes. For the three and six months ended June 30, 2012, the Company elected to carry back a portion of its deferred tax assets, including net operating losses, generated in the three and six months ended June 30, 2012, resulting in a reduction of its 2011 income tax liability and a benefit for income taxes of $0.6 million and $1.2 million, respectively.

The Company applies the accounting guidance in ASC 740 related to accounting for uncertainty in income taxes. The Company’s reserves related to taxes are based on a determination of whether, and how much of, a tax benefit taken by the Company in its tax filings or positions is more likely than not to be realized following resolution of any potential contingencies present related to the tax benefit. As of June 30, 2013, the Company had no unrecognized tax benefits. The Company recognizes interest and penalties related to uncertain tax positions in income tax expense.