11. Income Taxes

Significant components of deferred tax assets and liabilities included in the consolidated balance sheets at December 31, 2019 and 2018 were as follows (in thousands):

	December 31, 2019			December 31, 2018

Deferred tax assets:
Compensation	$	1,964		$	1,842
Allowance for doubtful accounts		514			600
Acquired net operating losses		840			-
Lease obligations - including closed clinics		21,445			34
Deferred tax assets	$	24,763		$	2,476
Deferred tax liabilities:
Depreciation and amortization	$	(13,195	)	$	(11,309	)
Operating lease right-of-use assets		(21,416	)		-
Other		(223	)		(179	)
Deferred tax liabilities		(34,834	)		(11,488	)
Net deferred tax liability	$	(10,071	)	$	(9,012	)

The deferred tax assets and liabilities related to purchased interests not yet finalized may result in an immaterial adjustment.

During 2019, the Company recorded deferred tax assets of $3.0 million related to the revaluation of redeemable non-controlling interests and acquisitions of non-controlling interests. In addition, during 2019, the Company recorded an adjustment to the deferred tax assets of $0.3 million as a result of a detailed reconciliation of its federal and state taxes payable and receivable accounts along with its federal and state deferred tax asset and liability accounts with its federal and state tax returns for 2018. The offset of this adjustment was a decrease to the previously reported federal income tax receivable. As of December 31, 2019, the Company has a federal income tax receivable of $1.5 million and state tax receivables of $1.3 million. The tax receivables are included in other current assets on the accompanying consolidated balance sheets

The differences between the federal tax rate and the Company’s effective tax rate for the years ended December 31, 2019, 2018 and 2017 were as follows (in thousands):

	December 31, 2019					December 31, 2018					December 31, 2017
U. S. tax at statutory rate	$	11,274		21.0	%	$	9,710		21.0	%	$	9,900		35.0	%
Tax legislation adjustment		-		0.0	%		-		0.0	%		(4,325	)	-15.3	%
State income taxes, net of federal benefit and tax reform		2,059		3.8	%		1,722		3.7	%		1,060		3.7	%
Excess equity compensation deduction		(871	)	-1.6	%		(806	)	-1.7	%		(1,139	)	-4.0	%
Non-deductible expenses		1,185		2.2	%		743		1.6	%		560		2.0	%
Other		-		0.0	%		-		0.0	%		(24	)	-0.1	%
	$	13,647		25.4	%	$	11,369		24.6	%	$	6,032		21.3	%

As a result of TCJA, the Company revalued its deferred tax assets and liabilities as of December 31, 2017. Based on a review and analysis as of December 31, 2017, the Company estimated a reduction of its net deferred tax liabilities by $4.3 million thereby reducing its provision for income taxes by such amount for the 2017 year.

Significant components of the provision for income taxes for the years ended December 31, 2019, 2018 and 2017 were as follows (in thousands):

	December 31, 2019		December 31, 2018		December 31, 2017
Current:
Federal	$	6,523	$	5,357	$	9,332
State		2,473		1,199		1,564
Total current		8,996		6,556		10,896
Deferred:
Federal		3,730		3,771		(5,233	)
State		921		1,042		369
Total deferred		4,651		4,813		(4,864	)
Total income tax provision	$	13,647	$	11,369	$	6,032

For 2019, 2018 and 2017, the Company performed a detailed reconciliation of its federal and state taxes payable and receivable accounts along with its federal and state deferred tax asset and liability accounts. The adjustments were immaterial. The Company considers this reconciliation process to be an annual control.

The Company is required to establish a valuation allowance for deferred tax assets if, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the projected future taxable income and tax planning strategies in making this assessment. Based upon the level of historical taxable income and projections for future taxable income in the periods which the deferred tax assets are deductible, management believes that a valuation allowance is not required, as it is more likely than not that the results of future operations will generate sufficient taxable income to realize the deferred tax assets.

The Company’s U.S. federal returns remain open to examination for 2016 through 2018 and U.S. state jurisdictions are open for periods ranging from 2015 through 2018.

The Company does not believe that it has any significant uncertain tax positions at December 31, 2019 and December 31, 2018, nor is this expected to change within the next twelve months due to the settlement and expiration of statutes of limitation.

The Company did not have any accrued interest or penalties associated with any unrecognized tax benefits nor was any interest expense recognized during the years ended December 31, 2019, 2018 and 2017.