14. INCOME TAXES

As of September 30, 2013, the Company had net deferred tax assets of $12,324, which is recorded as a non-current deferred tax asset of $12,538 specific to Silvercrest which consists primarily of assets related to temporary differences between the financial statement and tax bases of intangible assets related to its acquisition of partnership units of SLP, and a non-current deferred tax liability of $97 specific to SLP which consists primarily of liabilities related to differences between the financial statement and tax bases of intangible assets offset in part by amounts for deferred rent expense and a non-current deferred tax liability of $117 related to the corporate activity of SFS which is primarily related to temporary differences between the financial statement and tax bases of intangible assets.  Of the total net deferred taxes at September 30, 2013, $115 of the net deferred tax liabilities relate to non-controlling interests.  These amounts are included in the prepaid expenses and other assets and deferred tax and other liabilities on the Condensed Consolidated Statement of Financial Position, respectively.

As of December 31, 2012, the Company had net deferred tax liabilities of $(131), which is recorded as a non-current deferred tax liability of $(4) (specific to SLP which consists primarily of assets for deferred rent expense and equity-based compensation offset by a liability for the excess of book over tax basis of intangible assets) and a non-current deferred tax liability of $(127) related to the corporate activity of SFS which is primarily related to temporary differences between the financial statement and tax bases of intangible assets. These amounts are included in the prepaid expenses and other assets and deferred tax and other liabilities in the Consolidated Statement of Financial Condition, respectively.

The current tax expense was $546 and $295 for the three months ended September 30, 2013 and 2012, respectively. Of the amount for the three months ended September 30, 2013, $277 relates to Silvercrest’s corporate tax expense, $267 relates to SLP’s UBT liability and $2 relates to SFS’s corporate tax expense.  The deferred tax expense (benefit) for the three months ended September 30, 2013 and 2012, was $277 and $(5), respectively. When combined with current tax expense, the total income tax provision for the three months ended September 30, 2013 and 2012 is $823 and $290, respectively.

The current tax expense was $1,138 and $810 for the nine months ended September 30, 2013 and 2012, respectively. The deferred tax expense (benefit) for the nine months ended September 30, 2013 and 2012 was $351 and $(8), respectively, which when combined with current tax expense, resulted in an income tax provision for the nine months ended September 30, 2013 and 2012 of $1,489 and $802, respectively. The current expense increased from the comparable period for 2012 mainly due to corporate taxes at Silvercrest, which did not previously exist and increased profitability during 2013. The deferred expense difference is attributable primarily to the movement in deferred tax accounts with respect to various intangible assets between 2012 and 2013.

Of the total current tax expense for the three months ended September 30, 2013, $145 relates to non-controlling interests.  Of the deferred tax expense (benefit) for the three months ended September 30, 2013, $5 relates to non-controlling interests.  When combined with current tax expense, the total income tax provision for the three months ended September 30, 2013 related to non-controlling interests is $150.    With respect to the nine months ended September 30, 2013, the current tax expense related to non-controlling interests was $739, the deferred tax expense related to non-controlling interests was $78, and the total tax provision related to non-controlling interests was $817. 

In the normal course of business, the Company is subject to examination by federal, state, and local tax regulators. As of September 30, 2013, the Company’s U.S. federal income tax returns for the years 2010 through 2012 are open under the normal three-year statute of limitations and therefore subject to examination.

The Company does not believe that it has any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly increase or decrease within the next twelve months