Income Taxes

The components of the provision for income taxes are as follows:



	Years Ended December 31,
	2015		2014		2013
($ in thousands)
Current
Federal	$	28,077	$	31,787	$	10,395
State	2,539		3,168		1,787
Total current tax expense	30,616		34,955		12,182
Deferred
Federal	4,339		3,200		29,933
State	2,017		1,194		2,663
Total deferred tax expense	6,356		4,394		32,596
Total expense for income taxes	$	36,972	$	39,349	$	44,778

The following presents a reconciliation of the provision (benefit) for income taxes computed at the federal statutory rate to the provision (benefit) for income taxes recognized in the Consolidated Statements of Operations for the years indicated:



	Years Ended December 31,
	2015				2014					2013
($ in thousands)
Tax at statutory rate	$	23,675	35	%	$	47,922		35	%	$	41,968		35	%
State taxes, net of federal benefit	2,717		4		4,357			3		2,893			2
Uncertain tax positions	—		—		(30,961		)	(22	)	—			—
IRS audit resolution	—		—		15,505			11		—			—
Effect of net income attributable to noncontrolling interests	1,492		2		—			—		—			—
Change in valuation allowance	7,812		12		2,165			2		(264		)	—
Other, net	1,276		2		361			—		181			—
Income tax expense	$	36,972	55	%	$	39,349		29	%	$	44,778		37	%

The provision for income taxes reflects U.S. federal, state and local taxes at an estimated effective tax rate of 55%, 29% and 37% for the years ended December 31, 2015, 2014 and 2013, respectively. The Company's tax position for the years ended December 31, 2015 and 2014 was impacted by changes in the valuation allowance related to the unrealized loss position on the Company’s marketable securities. Additionally, the Company’s effective tax rate for the year ended December 31, 2014 was impacted by a net tax benefit of approximately $15.5 million due to the settlement of the Internal Revenue Service (“IRS”) examination of its 2011 federal consolidated corporate income tax return. The net benefit arises from the settlement of the Company's 2011 IRS exam and is comprised of the recognition of tax benefits from previously uncertain tax positions of approximately $31.0 million and a reduction in the available loss deduction of approximately $15.5 million of which both related to the past dissolution of a subsidiary.

Deferred taxes resulted from temporary differences between the amounts reported in the consolidated financial statements and the tax basis of assets and liabilities. The tax effects of temporary differences are as follows:



	December 31,
	2015			2014
($ in thousands)
Deferred tax assets:
Intangible assets	$	27,728		$	36,340
Net operating losses	20,591			21,547
Compensation accruals	7,804			6,757
Investments	8,704			8,717
Unrealized loss/(gain)	12,157			2,362
Other	118			46
Gross deferred tax assets	77,102			75,769
Valuation allowance	(10,855		)	(2,397		)
Gross deferred tax assets after valuation allowance	66,247			73,372
Deferred tax liabilities:
Intangible assets	(12,104		)	(12,718		)
Other investments	—			(492		)
Gross deferred tax liabilities	(12,104		)	(13,210		)
Deferred tax assets, net	$	54,143		$	60,162

At each reporting date, the Company evaluates the positive and negative evidence used to determine the likelihood of realization of its deferred tax assets. The Company maintained a valuation allowance in the amount of $10.9 million and $2.4 million at December 31, 2015 and 2014, respectively, relating to deferred tax assets on items of a capital nature as well as certain state deferred tax assets.

As of December 31, 2015, the Company had $40.3 million of net operating loss carry-forwards for federal income tax purposes. The related federal net operating loss carry-forwards are scheduled to begin to expire in the year 2029. As of December 31, 2015, the Company had state net operating loss carry-forwards, varying by subsidiary and jurisdiction, represented by a $6.5 million deferred tax asset. The state net operating loss carry-forwards are scheduled to begin to expire in 2016.

Internal Revenue Code Section 382 limits tax deductions for net operating losses, capital losses and net unrealized built-in losses after there is a substantial change in ownership in a corporation’s stock involving a 50 percentage point increase in ownership by 5% or larger stockholders. During the year ended December 31, 2009, due to changes in the Company’s stockholder base, the Company incurred an ownership change as defined in Section 382. At December 31, 2015, the Company has approximately $62.3 million in pre-change built-in losses that are reflected within the Company’s deferred tax assets noted above and are subject to an annual limitation of $4.2 million plus any cumulative unused Section 382 limitation from post-change tax years.

Activity in unrecognized tax benefits is as follows:



	Years Ended December 31,
	2015		2014			2013
($ in thousands)
Balance, beginning of year	$	—	$	32,602		$	33,948
Decrease related to tax positions taken in prior years	—		(32,602		)	(1,346		)
Increase related to positions taken in the current year	—		—			—
Balance, end of year	$	—	$	—		$	32,602

The Company’s practice is to classify interest and penalties related to income tax matters in income tax expense. The Company recorded no interest or penalties related to uncertain tax positions at December 31, 2015, 2014 and 2013.

During the year ended December 31, 2015, the Company recognized tax benefits of $1.1 million related to cumulative windfall deductions on certain stock-based incentive plans. Under ASC 718, these tax benefits are utilized for financial statement purposes when they serve to reduce income taxes payable. Under the Company’s accounting policy, net operating losses and benefits from other sources are recognized before windfall benefit carryovers. The tax benefit related to these windfall deductions was recorded as an increase to stockholders’ equity in the Company's Consolidated Balance Sheets.

The earliest federal tax year that remains open for examination is 2008 since unutilized net operating loss carry-forwards from 2008 could be denied when claimed in future years. The earliest open years in the Company’s major state tax jurisdictions are 2001 for Connecticut and 2011 for all of the Company's remaining state tax jurisdictions.