(3)	INCOME TAXES

The Company follows the provisions of the Financial Accounting Standards Codification 740 (ASC 740), Accounting for Uncertainty in Income Taxes. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

		September 30,			September 30,			September 30,
	2011			2010			2009

Beginning of year	$	2,483,000		$	2,411,000		$	2,435,000
Additions based on tax positions related to the current year		1,105,000			900,000			465,000
Additions for tax positions in prior years		208,000			76,000			143,000
Reductions for tax positions in prior years		(78,000	)		(35,000	)		0
Reductions as a result of completed audit examinations		(1,242,000	)		0			0
Reductions as a result of a lapse of the applicable statute of limitations		0			(869,000	)		(632,000	)

End of year	$	2,476,000		$	2,483,000		$	2,411,000

If recognized, unrecognized tax benefits would affect the effective tax rate.

The Company recognizes interest and penalties related to unrecognized tax benefits through the provision for income taxes. The Company has accrued approximately $95,000 and $171,000 for interest as of December 31, 2011 and 2010, respectively. Interest recorded during 2011, 2010 and 2009 was not considered significant.

The Company completed a routine audit examination with the Internal Revenue Service for tax years prior to 2010. As a result, unrecognized federal tax benefits pertaining to audited tax years prior to 2010 were reversed as of December 31, 2011. The Company is also subject to other periodic and routine audits in both domestic and foreign tax jurisdictions, and it is reasonably possible that the amounts of unrecognized tax benefits could change as a result of an audit. Based on the current audits in process, the payment of taxes as a result of audit settlements and the completion of tax examinations are not expected to have a significant impact on the Companys financial position or results of operations.

For the majority of tax jurisdictions, the Company is no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for years before 2007.

In May 2011, the State of Michigan enacted a new Corporate Income Tax that is effective January 1, 2012. The Company anticipates that the new Corporate Income Tax will not have a significant effect on the Companys consolidated financial position or results of operations.

The provision for income taxes is based on the earnings reported in the accompanying consolidated financial statements. The Company recognizes deferred income tax liabilities and assets for the expected future tax consequences of events that have been included in the consolidated financial statements or tax returns. Under this method, deferred income tax liabilities and assets are determined based on the cumulative temporary differences between the financial statement and tax bases of assets and liabilities using enacted tax rates. Deferred income tax expense is measured by the net change in deferred income tax assets and liabilities during the year.

The components of the provision for income taxes are as follows:

		September 30,		September 30,		September 30,
	2011		2010		2009
Currently payable:
Federal	$	63,307,583	$	54,032,045	$	31,377,218
State		1,663,000		789,000		896,000
Foreign		850,000		494,000		131,000

Total		65,820,583		55,315,045		32,404,218

Net deferred:
Primarily federal		13,943,000		10,391,000		(689,000	)

Provision for income taxes	$	79,763,583	$	65,706,045	$	31,715,218

The currently payable provision is further reduced by the tax benefits associated with the exercise, vesting or disposition of stock under the stock plans described in Note 5. These reductions totaled approximately $7,879,000, $7,832,000 and $68,000 in 2011, 2010 and 2009, respectively, and were recognized as an adjustment of additional paid-in capital.

The effective income tax rates are different from the statutory federal income tax rates for the following reasons:

		September 30,			September 30,			September 30,
	2011			2010			2009
Statutory federal income tax rate		35.0	%		35.0	%		35.0	%
State income taxes, net of federal income tax benefit		0.1			0.2			0.3
Domestic production exclusion		(2.3	)		(2.5	)		(2.0	)
Tax-exempt investment income		(0.0	)		(0.0	)		(0.1	)
Other		(0.2	)		(0.4	)		(0.3	)

Effective income tax rate		32.6	%		32.3	%		32.9	%

The tax effect of temporary differences which give rise to deferred income tax assets and liabilities at December 31, 2011 and 2010, are as follows:

		September 30,			September 30,			September 30,			September 30,
	2011						2010
	Current			Non-Current			Current			Non-Current
Assets:
Accruals not currently deductible	$	2,465,349		$	152,716		$	2,392,419		$	98,803
Stock based compensation		8,730,729			1,473,236			6,545,483			1,436,877
Impairment loss on available-for-sale securities					471,401						1,948,036
Capital loss
Other		4,874,704			3,809			4,107,951			1,897

Total deferred income tax assets		16,070,782			2,101,162			13,045,853			3,485,613

Liabilities:
Excess tax over book depreciation					(41,681,342	)					(25,849,074	)
Patent costs					(5,606,595	)					(2,996,184	)
Unrealized gain on investments					(3,027,206	)					(11,711,539	)
Other		(327,490	)					(607,627	)

Net deferred income taxes	$	15,743,292		$	(48,213,981	)	$	12,438,226		$	(37,071,184	)

Income taxes paid in cash were approximately $63,483,000, $63,557,000 and $27,518,000 in 2011, 2010 and 2009, respectively.