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INCOME TAXES
 12 Months Ended
Sep. 30, 2011
INCOME TAXES  
INCOME TAXES

NOTE 5 - INCOME TAXES

 

No provision has been made in the financial statements for income taxes because the Company has accumulated losses from operations since inception. Any deferred tax benefit arising from the operating loss carried forward is offset entirely by a valuation allowance since it is not currently estimable when and if the Company will have taxable income to take advantage of the losses. The valuation allowance has increased by $7,562 from $54,961, as of September 30, 2010.

 

 

Deferred Tax Asset

 

Balance

 

Tax

 

Rate

Federal loss carryforward (expires through 2031)

$

312,613

$

46,892

 

15%

State loss carryforward (expires through 2026)

$

312,613

$

15,631

 

5%

Valuation allowance

 

-

$

(62,523)

 

-

Deferred tax asset

 

-

$

-

 

-

 

Reported income tax expense is reconciled to the amount computed on the basis of income before income taxes at the statutory rate as follows:

 

 

 

For the years ended September 30,

 

 

2011

 

2010

Statutory Benefit (Expense)

 

(20%)

 

(20%)

Increase in Valuation Allowance

 

20%

 

20%

Reported provision for Income Taxes

 

-

 

-

 

We have no liabilities for unrecognized tax benefits and, as such, we have recorded no additional interest or penalties.

 

Our policy is to recognize potential interest and penalties accrued related to unrecognized tax benefits within income tax expense. For the years ended September 30, 2011 and 2010, we did not recognize any interest or penalties in our Statement of Operations, nor did we have any interest or penalties accrued in our Balance Sheet at September 30, 2011 and 2010 relating to unrecognized benefits.

 

The tax years 2007-2011 remain open to examination for federal income tax purposes and by the other major taxing jurisdictions to which we are subject.