9.	Income Taxes

The Company makes its best estimate to arrive at an expected annual effective tax rate; this rate is evaluated quarterly or more frequently if deemed necessary. In arriving at an expected annual effective tax rate, the Company does not consider unusual or infrequent events; discrete events are accounted for in the period in which they occur and may cause a variation from the normal relationship between income tax expense and pre-tax net income.

The Company recorded income tax expense of $48,041 (37.1% effective tax rate) and $152,798 (34.6% effective tax rate) during the three months ended March 31, 2014 and 2013, respectively. The effective tax rate increased primarily due to the non-recurrence of a partial release of a valuation allowance during the three months ended March 31, 2013.

Significant judgment is required in evaluating and reserving for uncertain tax positions. Although management believes adequate reserves have been established for all uncertain tax positions, the final outcomes of these matters may differ. Reserves for uncertain tax positions are adjusted as events occur and as new information arises. Reserves are released as statutes of limitations close. Additional interest on uncertain tax positions is accrued quarterly. The provision for income taxes includes a reserve for uncertain tax positions as well as the associated penalties and net interest accrued.

The Company is currently under audit in various tax jurisdictions for various years. Although the outcomes are uncertain, a reserve for potential liabilities has been established based on the best available information as to the audit outcomes. As audits are finalized, any excess reserves are released or any additional liabilities due exceeding reserves are expensed at the time the outcome is made known. Management does not believe the outcome of any current tax audits, individually or combined, will have a material effect on the results of operations. Reserves for potential tax assessments are included in the provision for income taxes.