7. INCOME TAXES
The Company has not made provision for income taxes in the years ended December 31, 2016 and 2015, respectively, since the Company has the benefit of net operating losses carried forward in these periods.
Deferred income tax assets consist of:
| December 31, | ||||||||
| 2016 | 2015 | |||||||
| Net operating loss carry-forwards | $ | 2,013,467 | $ | 1,862,771 | ||||
| Less valuation allowance | (2,013,467 | ) | (1,862,771 | ) | ||||
| Deferred income tax assets, net | $ | -- | $ | -- | ||||
Due to uncertainties surrounding the Company’s ability to generate future taxable income to realize these assets, a full valuation has been established to offset the net deferred income tax asset. Based on management’s assessment, utilizing an effective combined tax rate for federal and state taxes of approximately 42%, the Company has determined it to be more likely than not that a deferred income tax asset of approximately $2,013,467 and $1,862,771 attributable to the future utilization of the approximately $4,793,970 and $4,435,168 in eligible net operating loss carry-forwards as of December 31, 2016 and 2015, respectively, will not be realized. The Company will continue to review this valuation allowance and make adjustments as appropriate. The net operating loss carryforwards will begin to expire in varying amounts from year 2021 to 2035.
The Company is subject to taxation in the United States and certain state jurisdictions as well as in Argentina. The Company’s net operating loss carry forwards are subject to examination by the United States and applicable state tax authorities in the year of its utilization. There are currently no tax returns being examined by the IRS. The tax return filings for years 2013 through 2015 are still open for examination.