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Taxes
9 Months Ended
Sep. 30, 2011
Taxes

NOTE 11 — Taxes

 

Income tax expense during the three and nine months ended September 30, 2011, and the deferred income tax amounts shown on the Company’s Condensed Balance Sheets, is related entirely to the deferred tax liability on the portion of the Company’s goodwill amortized for tax purposes. Due to the indefinite characteristic of this deferred tax liability, it cannot be offset against deferred tax assets. As a result, the Company recognized deferred tax expense of $7,985 and $23,955 for the three and nine months ended September 30, 2011, respectively, compared to $7,531 in both the three and nine months ended September 30, 2010.

 

At December 31, 2010, the Company has an unrecognized tax benefit of approximately $597,000, which did not change significantly during the three and nine months ended September 30, 2011. Future changes in the unrecognized tax benefit are unlikely to have an impact on the effective tax rate due to the full valuation allowance recorded on the Company’s deferred tax assets, as realization of the deferred tax assets is dependent upon future taxable income.