Income Taxes

6 Months Ended

Sep. 30, 2013

Income Tax Disclosure [Abstract]

Income Taxes

7.  Income Taxes

The Company recognizes deferred tax assets and liabilities for future tax consequences of temporary differences between the carrying amounts of assets and liabilities and their respective tax bases.  Deferred tax assets and liabilities are measured using enacted tax rates applicable to the years in which those differences are expected to be settled.  The effect on deferred tax assets and liabilities of a change in tax rates is recognized in net income in the period that includes the enactment date.  Any interest and penalties related to uncertain tax positions are recorded as interest expense and general and administrative expense, respectively.

The income tax provision consists of the following for the three and six months ended September 30, 2013 and 2012:

	Three Months Ended						Six Months Ended
	September 30						September 30
	2013			2012			2013			2012
Current income tax expense	$	-		$	-		$	-		$	-
Deferred income tax benefit		(59,075	)		(28,534	)		(52,257	)		(98,118	)
Total income tax provision:	$	(59,075	)	$	(28,534	)	$	(52,257	)	$	(98,118	)
Effective tax rate		(44	%)		(103	%)		(33	%)		(61	%)

As of September 30, 2013, the Company has a statutory depletion carryforward of approximately $4,700,000, which does not expire.  At September 30, 2013, there was a net operating loss carryforward for regular income tax reporting purposes of approximately $3,200,000, which will begin expiring in 2021.  The Company’s ability to use the net operating loss carryforward and certain other tax attributes to reduce current and future U.S. federal taxable income is subject to limitations under the Internal Revenue Code.  This change in our effective tax rate was primarily due to the completion of our 2012 tax return which included a change in the statutory depletion carryforward resulting in a tax effect of approximately $75,000.

As of September 30, 2013, the Company had unrecognized tax benefits of approximately $677,000.  While it is expected the amount of unrecognized tax benefits will change in the next 12 months, we do not expect any change to have a significant impact on our results operations.  The recognition of the total amount of these unrecognized tax benefits would have an impact on the effective tax rate and if they are disallowed, we will be required to pay additional taxes.