NOTE 7 – INCOME TAXES
At December 31, 2017 the Company had available federal and state net operating loss carry forwards to reduce future taxable income. The amount available was approximately $2,621,252 federal and state purposes. The federal and state net operating loss carry forwards begin to expire in 2028. Given the Company's history of net operating losses, management has determined that it is more likely than not that the Company will not be able to realize the tax benefit of the net operating loss carry forwards. Accordingly, the Company has recognized a valuation allowance that offests the deferred tax asset for this benefit.
FASB ASC Topic 740 – Income Taxes (formerly SFAS 109) requires that the Company establish a valuation allowance when it is more likely than not that all or a portion of deferred tax assets will not be realized. Due to restrictions imposed by Internal Revenue Code Section 382 regarding substantial changes in ownership of companies with net operating loss carry forwards, the utilization of the Company's net operating loss carry- forward will likely be limited as a result of cumulative changes in stock ownership. The Company has not recognized a deferred asset and, as a result, the change in stock ownership will not result in any change to the valuation allowances. Upon the attainment of taxable income by the Company, management will assess the likelihood of realizing the tax benefit associated with the use of the carry forwards and will recognize a deferred tax asset at that time.
The provision for Federal income tax consists of the following:
| For the Year Ended December 31 | |||||
| 2017 | 2016 | ||||
| Federal income tax benefit attributable to: | |||||
| Net operating loss | $ | 136,491 | $ | 177,101 | |
| Less: valuation allowance | $ | (136,491) | $ | (177,101) | |
| Provision for Federal tax benefit | $ | - | $ | - | |
The cumulative tax effect at the expected rate of 23.3% of significant items comprising our net deferred tax amount is as follows:
| For the Year Ended December 31 | |||||
| 2017 | 2016 | ||||
| Deferred tax assets attributable to: | |||||
| Net operating loss carryover | $ | 837,351 | $ | 700,860 | |
| Less: valuation allowance | $ | (837,351) | $ | (700,860) | |
| Net deferred tax assets | $ | - | $ | - | |
The Company files income tax returns in the U.S. federal jurisdiction and various states. The Company is subject to U.S. federal or state income tax examinations by tax authorities for three years following the filing of such returns. During the periods open to examination, the Company has net operating loss and tax credit carry forwards for U.S. federal and state tax purposes that have attributes from closed periods. Since these NOL's and tax credit carry forwards may be utilized in future periods, they remain subject to examination.