|9 Months Ended|
Sep. 30, 2022
|Income Tax Disclosure [Abstract]|
Note 19. Income Taxes
The Company calculates the provision for income taxes during interim periods by applying an estimate of the forecasted annual effective tax rate for the full fiscal year to "ordinary" income or loss (pretax income or loss excluding unusual or infrequently occurring discrete items) for the reporting period. Income tax expense for the three months ending September 30, 2022 and September 30, 2021 was $87 and $729, respectively. Income tax expense for the nine months ending September 30, 2022 and September 30, 2021 was $167 and $807, respectively. The effective tax rate, including discrete items, was 0% for the periods ended September 30, 2022 and September 30, 2021. The tax provision for the three and nine months ended September 30, 2022 is impacted by certain permanent non-deductible portions of the goodwill impairment, partially offset by the valuation allowance recorded against the deferred tax assets.
The Company reduced its deferred tax liability by $12,219 and $17,700 for the three and nine months ended September 30, 2022, respectively, through additional paid in capital related to the exchange of Fathom OpCo's exchangeable Class A Units (and the associated vote-only Class B shares) for an equal number of Class A shares.
The Company evaluates the realizability of the deferred tax assets on a quarterly basis and has determined that it is appropriate to record a valuation allowance on any net deferred tax assets. The deferred tax liability recorded in previous periods has been fully offset due to the exchanges of Fathom OpCo Class A units as described above.
As of September 30, 2022, the Company did not recognize income tax expense or benefits associated with uncertain tax positions.
The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.
Reference 1: http://www.xbrl.org/2003/role/disclosureRef