What authorities are used to derive the technical merits of a tax position for Checkers?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
The Company evaluates uncertain tax positions based upon one of the following conditions: (1) the tax position is not more likely than not to be sustained; (2) the tax position is more likely than not to be sustained, but for a lesser amount; or (3) the tax position is more likely than not to be sustained, but not in the financial period in which the tax position was originally taken. For purposes of evaluating whether or not a tax position is uncertain, (1) the Company presumes the tax position will be examined by the relevant taxing authority that has full knowledge of all relevant information; (2) the technical merits of a tax position are derived from authorities, such as legislation and statutes, legislative intent, regulations, rulings, and case law and their applicability to the facts and circumstances of the tax position; and (3) each tax position is evaluated without consideration of the possibility of offset or aggregation with other tax positions taken.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 91)
What This Means (2025 FDD)
According to Checkers' 2025 Franchise Disclosure Document, the technical merits of a tax position are derived from several authorities. These include legislation and statutes, which are the formal laws and regulations enacted by governmental bodies. The legislative intent behind these laws is also considered to understand the purpose and scope of the legislation.
Regulations, which are rules and administrative codes issued by government agencies to implement and enforce legislation, are another source. Rulings, which are official interpretations or clarifications of tax laws and regulations issued by tax authorities, are also used. Case law, which refers to court decisions that interpret and apply tax laws, provides additional guidance.
Finally, the applicability of these authorities to the specific facts and circumstances of the tax position is evaluated to determine the appropriate tax treatment. This comprehensive approach ensures that Checkers' tax positions are well-supported and in compliance with applicable laws and regulations.