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Income Taxes
9 Months Ended
Sep. 30, 2012
Income Taxes  
Income Taxes

(12)              Income Taxes

 

US GAAP provides guidance on financial statement recognition and measurement of tax positions taken, or expected to be taken, in tax returns.  As of September 30, 2012 and December 31, 2011, the gross amount of unrecognized tax benefits was $72,000 and $101,000, respectively.  If recognized, the tax benefits would reduce tax expense and accordingly, increase net income.  The amount of unrecognized tax benefits may increase or decrease in the future for various reasons including adding amounts for current tax year positions, expiration of open income tax returns due to statutes of limitation, changes in management’s judgment about the level of uncertainty, status of examination, litigation and legislative activity and the addition or elimination of uncertain tax positions.

 

Bancorp’s policy is to report interest and penalties, if any, related to unrecognized tax benefits in income tax expense.  As of September 30, 2012 and December 31, 2011, the amount accrued for potential payment of interest and penalties was $4,000 and $7,000, respectively.