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Taxes
 9 Months Ended
Sep. 30, 2023
Income Tax Disclosure [Abstract]  
Taxes
9.
Taxes

Income Taxes

The Company’s effective tax rates for the three and nine months ended September 30, 2023 were (727.7%) and 44.0%, respectively, compared to 25.6% and 24.9% for the three and nine months ended October 1, 2022, respectively. The effective tax rate for interim periods is determined using an annual effective tax rate, adjusted for discrete items. In fiscal 2023, the Company was required to increase the valuation allowance recorded against U.S. deferred tax assets as a result of the limitation on interest deductions in the U.S. The forecasted full-year tax expense, which included the increase in valuation allowance, in relation to the Company’s forecasted full-year pretax loss (albeit minimal), drove an unusually high negative annual effective tax rate, resulting in an income tax benefit of $18,933 for the nine months ended September 30, 2023. This tax benefit resulted in an income tax benefit of $38,447 for the three months ended September 30, 2023, since an income tax expense of $19,515 was recorded for the six months ended July 1, 2023.

For the nine months ended September 30, 2023, the difference between the U.S. federal statutory tax rate and the Company’s consolidated effective tax rate was primarily due to the valuation allowance noted above. In addition, the effective tax rate was impacted by tax expense from income earned in foreign jurisdictions, partially offset by a tax benefit related to foreign-derived intangible income (“FDII”). For the nine months ended October 1, 2022, the tax benefit was impacted by a U.S. state tax rate change, partially offset by tax shortfalls from stock compensation. For the nine months ended October 1, 2022, the difference between the U.S. federal statutory tax rate and the Company’s consolidated effective tax rate was primarily due to state income tax expense and tax expense from income earned in foreign jurisdictions, partially offset by a tax benefit related to FDII.

Non-Income Tax Matters

The Internal Revenue Service (the “IRS”) notified the Company of certain penalties assessed related to the annual disclosure and reporting requirements of the Affordable Care Act. The Company is in the process of appealing this determination and does not believe it has any liability with respect to this matter. Until the appeals process is complete, the IRS will maintain a federal tax lien which is currently limited to certain IRS refunds due to the Company.