Income Taxes

9 Months Ended

Sep. 30, 2012

Income Taxes:

Income Taxes

Note 2:  Income Taxes

Due to losses at September 30, 2012 and 2011, the Company had no income tax liability.  At September 30, 2012 and 2011, the Company had available unused operating loss carry forwards of approximately $82,824 and $55,425, respectively, which may be applied against future taxable income and which expire in various years through 2032.

The amount of and ultimate realization of the benefits from the operating loss carry forwards for income tax purposes is dependent, in part, upon the tax laws in effect, the future earnings of the Company and other future events, the effects of which cannot be determined at this time.  Because of the uncertainty surrounding the realization of the loss carry forwards, the Company has established a valuation allowance equal to the tax effect of the loss carry forwards and, therefore, no deferred tax asset has been recognized for the loss carry forwards.  The net deferred tax assets are approximately $30,893 and $20,690 as of September 30, 2012 and 2011, respectively, with an offsetting valuation allowance of the same amount resulting in a change in the valuation allowance of approximately $9,005 during the nine months ended September 30, 2012.

Components of income tax are as follows:

		Nine months ended September 30, 2012		Nine months ended September 30, 2011
Current
Federal	$	0	$	0
State	$	0	$	0
	$	0	$	0
Deferred	$	0	$	0
	$	0	$	0

A reconciliation of the provision for income tax expense with the expected income tax computed by applying the federal statutory income tax rate to income before provision for income taxes as follows:

		Nine months ended September 30, 2012		Nine months ended September 30, 2011
Income tax computed at Federal statutory tax rate of 34%	$	(8,208)	$	(2,081)
State taxes (net of federal benefit) of 3.3% for 2012 and 2011		(797)		(202)
Deferred taxes and other		9,005		2,283
	$	0	$	0

The Company has no tax positions at September 30, 2012 and 2011, for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility.  The Company recognizes interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses.  During the period ended September 30, 2012 and 2011, the Company recognized no interest and penalties.  The Company had no accruals for interest and penalties at September 30, 2012 and 2011.

Under the rules of the Internal Revenue Service, the Company's tax returns for the previous three years remain open for examination.