Accrued expenses and other current liabilities

12 Months Ended

Dec. 31, 2023

Accrued expenses and other current liabilities

7. Accrued expenses and other current liabilities

Accrued expenses and other current liabilities consist of the following (in thousands):


	December 31,		December 31,
	2023		2022
Accrued expenses	$	13,773	$	8,494
Indirect tax reserves	1,432		6,627
Indirect tax payables	8,758		9,137
Other current liabilities	3,815		6,989
Accrued expenses and other current liabilities	$	27,778	$	31,247

Indirect tax payables relate to amounts collected from customers on behalf of third-party taxing authorities, primarily on sales in the U.S. and in international jurisdictions. Indirect tax payables also include withholding taxes on payments made to the Company’s instructors before remitting these amounts to the taxing authorities.

Instructor withholding tax reserves—

Prior to March 2020, the Company had not obtained appropriate taxpayer identification forms from instructors, nor remitted applicable tax withholding amounts to the U.S. Internal Revenue Service (“IRS”) where required. In accordance with GAAP, the Company recorded a provision for its tax exposure when it was both probable that a liability had been incurred and the amount of the exposure could be reasonably estimated.

Beginning in March 2020, the Company began collecting appropriate taxpayer identification forms from its instructors, assessing whether the forms justified a reduced rate of withholding or withholding exemption, and remitting withholding tax payments to the IRS where required. The Company also began reporting payments to its instructors and the IRS annually where required to do so.

In 2020, the Company approached the IRS to address the historical tax withholding amounts for instructors and engaged in a voluntary disclosure program. As of December 31, 2023, the Company has filed all outstanding withholding tax returns and has paid the associated tax obligation and corresponding interest to the IRS. The Company received a closing letter from the IRS on the matter during the fiscal year ended December 31, 2023, and considered the matter resolved as of December 31, 2023.

Changes to the instructor withholding tax reserve are as follows (in thousands):


	Fiscal Year Ended December 31,
	2023		2022		2021
Balance, beginning of period	$	2,528	$	17,036	$	22,166
Amounts charged to (released from) expense	89		(781)		(5,130)
Net payments and settlements	(2,617)		(13,727)		—
Balance, end of period	$	—	$	2,528	$	17,036