On March 27, 2020, President Trump signed into U.S. federal law the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), which is aimed at providing emergency assistance and health care for individuals, families, and businesses affected by the COVID-19 pandemic. The CARES Act, among other things, includes provisions relating to refundable payroll tax credits, deferment of employer side social security payments, net operating loss carry-back periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitations and technical corrections to tax depreciation methods for qualified improvement property.

In particular, under the CARES Act, for taxable years beginning in 2019 and 2020, the base for interest deductibility is increased from 30% to 50% of EBITDA. As of December 31, 2020, the Company estimated that the net tax benefit related to the CARES Act is approximately $2.4 million. The Company is expecting to defer $37.0 million of employer share Social Security tax under the CARES Act that will be paid equally by December 31, 2021 and 2022. The Company has analyzed the impact of the CARES Act on its financial statements.


	Year Ended
		December 31,		December 31,		December 31,
		2020		2019		2018
		(Restated)
Domestic		$	(67,610)	$	(141,068)	$	(94,924)
Foreign		97,164		81,876		60,685
Income (loss) before income taxes		$	29,554	$	(59,192)	$	(34,239)


	Year Ended
	December 31,		December 31,		December 31,
	2020		2019		2018
	(Restated)
Current
Federal	$	1,414	$	—	$	—
State	—		—		—
Foreign	9,035		6,507		6,991
Total current expense (benefit)	10,449		6,507		6,991
Deferred
Federal	(8,181)		(15,638)		(9,652)
State	—		—		—
Foreign	—		—		—
Total deferred (benefit) expense	(8,181)		(15,638)		(9,652)
Provision for income taxes	$	2,268	$	(9,131)	$	(2,661)


	Year Ended
	December 31,		December 31,		December 31,
	2020		2019		2018
	(Restated)
Amount computed at statutory federal income tax rate	$	6,358	$	(12,452)	$	(7,471)
Increases (decreases) in tax resulting from:
CARES Act adjustment	(2,435)		—		—
Section 250 Deduction	(2,834)		(2,682)		(743)
Non taxable income	(2,868)		(1,071)		(1,049)
Non deductible compensation	1,735		—		—
Change in valuation allowance	4,180		5,601		7,026
Effect of foreign operations	87		135		505
Change in Uncertain tax position	2,272		237		553
Minority Interest	748		552		(29)
Transaction costs	(865)		—		—
Warrants fair value adjustment	(3,388)		—		—
Other permanent differences, net	(722)		549		(1,453)
Provision for income taxes	$	2,268	$	(9,131)	$	(2,661)

During the years ended December 31, 2020, 2019 and 2018 the Company recognized a state income tax (benefit) expense of approximately $1.1 million, $(0.1) million and $(1.3) million, respectively, which are recorded in selling, general and administrative expenses in the consolidated statements of operations.

The Tax Cuts and Jobs Act subjects a U.S. shareholder to a minimum tax on “global intangible low-taxed income” ("GILTI") earned by certain foreign subsidiaries. The FASB Staff Q&A, Topic 740 No. 5, Accounting for Global Intangible Low-Taxed Income, states that an entity can make an accounting policy election to either recognize deferred taxes for temporary differences expected to reverse as GILTI in future years or provide for the tax expense related to GILTI resulting from those items in the year the tax is incurred. The Company has elected to recognize the resulting tax on GILTI as a period expense in the period the tax is incurred and has incurred tax for the year ended December 31, 2020.

As of December 31, 2020, 2019, and 2018, the Company had foreign tax credit carryforwards for federal tax purposes of approximately $36.0 million, $35.6 million and $33.1 million, respectively, which will expire from 2024 to 2030.

As of December 31,2020, the Company had net operating loss (“NOL”) carryforwards and work opportunity tax credit (“WOTC”) for federal tax purposes of approximately $8.8 million and $1.0 million, respectively. The Federal NOL has an indefinite carryforward life and the WOTC will expire from 2037 and 2039. As of December 31, 2020, 2019, and 2018, the Company had net operating loss (“NOL”) carryforwards for state tax purposes of approximately $77.1 million, $77.7 million and $73.4 million, respectively, which will expire from 2020 to 2024.

We record a net valuation allowance against deferred tax assets to the extent we believe these assets will more likely than not be realized. In making such determination, if the Company’s deferred tax are realizable, we consider all positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent results of operations. If we were to determine that we would be

able to realize our deferred income tax assets in the future in excess of our net recorded amount or would no longer be able to realize our deferred income tax assets in the future as currently recorded, we would make an adjustment to the valuation allowance which would decrease or increase the provision for income taxes. Based on Company’s analysis on the realizability of the Company’s deferred tax as of December 31, 2020, the Company recorded an additional valuation allowance of $4.2 million before the prior year provision to return adjustment.

The Company is subject to income taxes in the U.S. and various state and foreign jurisdictions. Tax statutes and regulations within each jurisdiction are subject to interpretation and require the application of significant judgment. The Company’s consolidated federal income tax returns through March 14, 2016 are no longer subject to audit. However, the Company is subject to U.S. Federal, state, and foreign tax examinations for years ranging from 1993 to 2018. The Company does not expect the resolution of these examinations to have a material impact on its results of operations, financial condition or cash flows.

The Company has recorded other receivables from third parties related to the indemnification of certain international contingent tax liabilities, net of tax benefit, of approximately $5.0 million, $5.0 million and $13.6 million as of December 31, 2020, 2019 and 2018, respectively.

The tax effects of temporary differences that give rise to deferred taxes are presented below (in thousands):


	2020		2019
Deferred tax assets
Accrued compensation benefits	$	14,416	$	8,204
Reserves	5,171		4,670
Net operating loss and credit carryover	4,877		3,202
Foreign tax credit carryover	35,981		35,629
Tax reserve benefit	5,409		3,916
Interest carryover	2,080		16,438
Operating lease liability	43,280		39,283
Other	4,722		4,846
Total deferred tax assets	115,936		116,188
Valuation allowance	(12,050)		(13,784)
Net deferred tax assets	103,886		102,404
Deferred tax liabilities
Depreciation	(4,087)		(4,384)
Prepaid expenses	(3,341)		(1,779)
Unbilled receivables	(2,178)		(22,958)
Intangible assets	(54,908)		(31,480)
Operating lease right-of-use assets	(43,034)		(37,540)
Investment in unconsolidated foreign subsidiary	(727)		(1,051)
Total deferred tax liabilities	(108,275)		(99,192)
Net deferred tax assets (liabilities)	$	(4,389)	$	3,212