
(9)	Income Taxes

The Company recognizes liabilities, interest and penalties for potential tax issues based on its estimate of whether, and the extent to which, additional taxes may be due as determined under ASC Topic 740 — Income Taxes. The Company recorded approximately $0.0 and $17.7 million for the three and nine months ended September 30, 2011, respectively, associated with uncertain tax positions. As of September 30, 2011, the Company had unrecognized tax benefits of approximately $0.2 million which, if recognized, would impact the Company’s effective tax rate. Unrecognized tax benefits that are not expected to be settled within the next twelve months are included in other long-term liabilities in the Condensed Consolidated Balance Sheets; unrecognized tax benefits that are expected to be settled within the next twelve months are included in income taxes payable. The Company has not accrued any amounts for interest or penalties related to uncertain tax positions. The Company’s accounting policy with respect to interest and penalties related to tax uncertainties is to classify these amounts as income taxes.

CVR and its subsidiaries file U.S. federal and various state income and franchise tax returns. At September 30, 2011, the Company’s tax filings are generally open to examination in the United States for the tax years ended December 31, 2008 through December 31, 2010 and in various individual states for the tax years ended December 31, 2007 through December 31, 2010.

The Company’s effective tax rate for the three and nine months ended September 30, 2011 was 36.3% and 36.5%, respectively, as compared to the Company’s combined federal and state expected statutory tax rate of 39.7%. The Company’s effective tax rate for the three and nine months ended September 30, 2011 is lower than the statutory rate primarily due to the reduction of income subject to tax associated with the noncontrolling ownership interest of CVR Partners’ earnings beginning April 13, 2011, as well as benefits for domestic production activities. The Company’s effective tax rate for the three and nine months ended September 30, 2010 was 35.8% and 28.6%, respectively. The Company’s effective tax rate for the three and nine months ended September 30, 2010 varies from the statutory rate primarily due to the receipt and recognition of interest income on federal income tax refunds received during the second quarter of 2010.