What is the purpose of the 'Due from IRS' line item in All Team's cash flow statement?
All_Team Franchise · 2025 FDDAnswer from 2025 FDD Document
$ | 667,144 | $ | 787,144 |
ALL TEAM FRANCHISE CORPORATION STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023
| 2024 | 2023 | ||
|---|---|---|---|
| CASH FLOWS FROM OPERATING ACTIVITIES | |||
| Net income | $ (43,528) | $ 201,944 | |
| Adjustments to reconcile net income to net cash | |||
| provided by operating activities: | |||
| Allowance for credit losses | 6,000 | 5,501 | |
| Changes in account balances: | |||
| Accounts receivable - trade | 479,748 | 1,387,458 | |
| Prepaid expenses | (61,295) | (16,270) | |
| Advances | (434,801) | (605,008) | |
| Due from IRS | 49,780 | (49,780) | |
| Accounts payable-trade | (882) | 3,528 | |
| Accrued expenses | (107,077) | (45,671) | |
| Other funding liabilities | 213,416 | (326,541) | |
| Total Adjustments | 144,889 | 353,217 | |
| Total Cash Provided by Operating Activities | 101,361 | 555,161 | |
| CASH FLOWS FROM INVESTING ACTIVITIES | |||
| Payments on note receivable - franchises | - | - | |
| Total Cash Provided by Investing Activities | - | - | |
| CASH FLOWS FROM FINANCING ACTIVITIES | |||
| Proceeds from credit line payable | 9,972,228 | 15,371,492 | |
| Pr |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 33)
What This Means (2025 FDD)
According to All Team's 2025 Franchise Disclosure Document, the 'Due from IRS' line item reflects the balance of funds owed to or from the Internal Revenue Service. In 2024, this figure does not appear as a current asset, while in 2023, All Team was due $49,780 from the IRS.
In the statements of cash flows, the 'Due from IRS' is an adjustment to reconcile net income to net cash provided by operating activities. In 2024, there is no adjustment listed. In 2023, the adjustment was ($49,780). This indicates a decrease in cash because All Team either received a refund from the IRS or offset some tax liability.
A prospective franchisee should understand that this line item can fluctuate depending on All Team's tax situation and any overpayments or underpayments of taxes during those years. It is a normal part of financial reporting to account for these types of transactions with the IRS.