Quarterly report pursuant to Section 13 or 15(d)

Note 5 - Income Taxes

v3.10.0.1
Note 5 - Income Taxes
9 Months Ended
Sep. 30, 2018
Notes to Financial Statements  
Income Tax Disclosure [Text Block]
5.
INCOME TAXES
 
The following table reconciles the difference between the statutory federal income tax rate for the Company and the effective income tax rate on continuing operations for the
nine
months ended
September 30, 2018:
 
Statutory rate    
21.0
%
Noncontrolling interests    
(1.0
%)
Foreign earnings not subject to U.S. income tax    
(3.2
)%
Foreign taxes not creditable against U.S. income tax    
(2.9
)%
Unrecognized tax benefit    
4.5
%
Return to provision adjustment    
(4.0
)%
Other
   
1.1
%
     
15.5
%
 
As of
December 31, 2017,
the Company's net operating loss carryforwards excluded potential tax benefits of
$3.9
million as a result of uncertainty regarding interpretation of the new U.S. tax legislation signed into law on
December 22, 2017.
Subsequent guidance has confirmed that the Company should recognize the tax benefits of
$3.9
million and therefore, for the
nine
months ending September
30,
2018,
the Company removed the valuation allowance previously established against the net operating loss carryforwards.
 
During the preparation of the
2017
federal income tax return in the
third
quarter of
2018,
the Company realized management overestimated the available foreign taxes that could be credited against the
2017
transition tax.  This resulted in an additional tax liability of
$3.4
million on its
2017
federal income tax return.  This additional liability was recorded as a return-to-provision adjustment to tax expense during the
three
months ended
September 30, 2018. 
Upon assessing the out of period adjustment from both a quantitative and qualitative perspective, the Company believes that this out of period adjustment is immaterial to both the year ended
December 31, 2017
and the
three
months ended
September 30, 2018
financial statements.