NOTE 7. INCOME TAXES
The components of the Company’s deferred tax asset are as follows as of December 31, 2016:
| December 31, 2016 | December 31, 2015 | |||||||
| Net operating loss carry forward at 35% | $ | 4,886,850 | $ | 4,615,115 | ||||
| Valuation allowance | (4,886,850 | ) | (4,615,115 | ) | ||||
| Net deferred tax allowance | $ | - | $ | - | ||||
Deferred tax asset consists of accumulated net operating losses of approximately $13,875,000 and $13,186,000 as of December 31, 2016 and 2015, respectively, which expire between 2033 and 2036.
The reconciliation of income tax expense at the U.S. statutory rate of 35% for the years ended December 31, 2016 and 2015 is as follows:
| 2016 | 2015 | |||||||
| US Statutory rate | 35 | % | 35 | % | ||||
| Valuation allowance | -35 | % | -35 | % | ||||
| Income tax provision | - | - | ||||||
The Company had no gross unrecognized tax benefits that, if recognized, would affect the effective income tax rate in future periods. At December 31, 2016, the amount of gross unrecognized tax benefits before valuation allowances and the amount that would favorably affect the effective income tax rate in future periods after valuation allowances were $0. The Company has not accrued any additional interest or penalties.
The Company files income tax returns in the United States. The Company will file its U.S. federal return for the year ended December 31, 2016 in 2017. Once filed, the 2016 U.S. federal return and those for 2015 and 2014 will be considered as open tax years. No tax returns are currently under examination by any tax authorities. The Company has not accrued any additional interest or penalties or the delinquency of our outstanding tax returns as we have incurred net losses in those periods still outstanding.