Income Taxes

3 Months Ended

Mar. 31, 2022

Income Tax Disclosure [Abstract]

Income Taxes

Note 17. 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. The provision for income taxes was $454 for the three months ending March 31, 2022 compared to $9 for the three months ended March 31, 2021. The effective tax rate, including discrete items, was 2.48% for the period ended March 31, 2022 compared to (1.91%) for the three months ended March 31, 2021. The change in the effective tax rate relates primarily to the change in organizational structure stemming from the Business Combination in December 2021. In addition, the tax provision for the period ended March 31, 2022 is impacted by permanent differences with respect to gains and losses recorded on the Fathom Earnout Shares liability, Sponsor Earnout Shares liability, and Warrant liability, none of which were outstanding liabilities as of March 31, 2021.

The Company evaluates the realizability of the deferred tax assets on a quarterly basis and establishes a valuation allowance when it is more likely than not that all or a portion of a deferred tax asset may not be realized. For the three months ended March 31, 2022, the Company made no material adjustments to its assertion that deferred tax assets are not more-likely than not to be realized.

As of March 31, 2022, the Company did not recognize income tax expense or benefits associated with uncertain tax positions.