Which tax years for Craters & Freighters remain subject to examination by the IRS?

According to Craters & Freighters' 2025 Franchise Disclosure Document, the tax years 2020 through 2023 remain subject to examination by the IRS as of December 31, 2024. Craters & Freighters states that its evaluation revealed no uncertain tax positions that would have a material impact on the financial statements. Additionally, Craters & Freighters does not anticipate any reasonably possible changes occurring within the next twelve months that will materially impact the financial statements.

As Craters & Freighters operates as an S-Corporation, it's a pass-through entity, meaning any changes resulting from an IRS or Colorado Department of Revenue examination would not affect the entity level but rather the shareholder's personal tax liability. This structure is common for many franchise systems, as it allows profits and losses to be passed directly to the owners without being subject to corporate tax rates.

For a prospective franchisee, this information indicates that while the company's financial statements have been audited, tax years prior to 2024 are still open for potential IRS review. While Craters & Freighters believes any changes resulting from these examinations will not have a material impact, it's important for franchisees to understand the implications of the S-Corporation structure and how it affects their individual tax situations. Franchisees should consult with their own financial advisors to assess any potential risks or liabilities related to these open tax years.