Income Taxes

9 Months Ended

Sep. 30, 2011

Income Taxes

Income Tax Disclosure [Text Block]

NOTE 2. INCOME TAXES

Deferred income taxes arise from temporary differences in recognition of certain

revenues and expenses between financial statement and income tax basis of

accounting, and also net operating loss carry-forwards and other tax credit

carry-forwards

At September 30, 2011, the Company had a federal net operating loss

carry-forward of approximately $2,707,000. A deferred tax asset of approximately

$541,000 has been partially offset by a valuation allowance of approximately

$364,000 due to federal net operating loss carry-back and carry-forward

limitations.

At September 30, 2011, the Company also had approximately $177,000 in deferred

income tax liability attributable to timing differences between federal income

tax depreciation, depletion and book depreciation, which has been offset against

the deferred tax asset related to the net operating loss carry-forward.

Management evaluated the Company's tax positions under FASB ASC Topic 740

"UNCERTAIN TAX POSITIONS," and concluded that the Company had taken no uncertain

tax positions that require adjustment to the consolidated financial statements

to comply with the provisions of this guidance. With few exceptions, the Company

is no longer subject to income tax examinations by the U.S. federal, state or

local tax authorities for years before 2008.