AMN 2017 Annual Report

52 several years and the Company received a final determination from the IRS in July 2015 on both the Revenue Agent Report (“RAR”) adjustments and Employment Tax Examination Report (“ETER”) assessments, effectively settling these audits with the IRS. The IRS conducted and completed a separate audit of the Company’s 2011 and 2012 tax years that focused on income and employment tax issues similar to those raised in the 2007 through 2010 examination. The IRS completed its audit during the quarter ended March 31, 2015, and issued its RAR and ETER to the Company with proposed adjustments to the Company’s taxable income for 2011 and 2012 and net operating loss carryforwards from 2010 and assessments for additional payroll tax liabilities and penalties for 2011 and 2012 related to the Company’s treatment of certain non-taxable per diem allowances and travel benefits. The Company filed a Protest Letter for both the RAR and ETER in April 2015. The Company received a final determination from the IRS in November 2017 on both the 2011 and 2012 RAR adjustments and ETER assessments, respectively, effectively settling these audits with the IRS for $2,000 (including interest) during the fourth quarter of 2017. As a result, the Company recorded federal income tax benefits of approximately $800 during the quarter ended December 31, 2017 as the settlement was less than the previously recorded uncertain tax position reserve. The IRS began an audit of the Company’s 2013 tax year during the quarter ended June 30, 2015. The Company believes its reserve for unrecognized tax benefits and contingent tax issues is adequate with respect to all open years. Notwithstanding the foregoing, the Company could adjust its provision for income taxes and contingent tax liability based on future developments. Tax Cuts and Jobs Act On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”). The Tax Act makes broad and complex changes to the U.S. tax code, including, but not limited to, reducing the U.S. federal corporate tax rate from 35 percent to 21 percent. Tax Act changes that affect the Company in 2017 are primarily tax rate changes on certain deferred tax assets (“DTAs”) and deferred tax liabilities (“DTLs”). The Tax Act also establishes new tax laws that will affect 2018 and beyond, including, but not limited to, (1) reduction of the U.S. federal corporate tax rate; (2) the repeal of the domestic production activity deduction; (3) limitations on the deductibility of certain executive compensation; and (4) limitations on various entertainment and meals deductions. The SEC staff issued Staff Accounting Bulletin No. 118 (“SAB 118”), which provides guidance on accounting for the tax effects of the Tax Act. SAB 118 provides a measurement period that should not extend beyond one year from the Tax Act enactment date for companies to complete the accounting under ASC 740. To the extent that a company’s accounting for certain income tax effects of the Tax Act is incomplete but it is able to determine a reasonable estimate, it must record a provisional estimate in the financial statements. In connection with the Company's initial analysis of the impact of the Tax Act, the Company recorded a discrete net tax benefit of $14,039 in the quarter ended December 31, 2017. This net benefit primarily consists of a net benefit for the corporate rate reduction on the Company's existing deferred tax assets and liabilities. The Company's accounting for the following elements of the Tax Act is incomplete. However, the Company was able to make reasonable estimates of certain effects and, therefore, recorded provisional adjustments for items impacting executive compensation and accounting methods. (8) Notes Payable and Credit Agreement (a) The Company ’ s Credit Agreement and Related Credit Facilities Credit Agreement Prior to February 9, 2018 The Company is party to a credit agreement (as amended to date, the “Credit Agreement”) with several lenders in respect of three credit facilities (the “Credit Facilities”), including (A) a $275,000 revolver facility (the “Revolver”), which includes a $40,000 sublimit for the issuance of letters of credit and a $20,000 sublimit for swingline loans, (B) a $150,000 secured term loan facility (the “Original Term Loan”) and (C) a $75,000 secured term loan facility (the “Second Term Loan,” and together with the Original Term Loan, the “Term Loans”). The maturity dates of the Revolver and the Original Term Loan, on the one