NOTE 9 – INCOME TAXES
The Company has incurred no income taxes during the period from July 26, 2002 (inception) through September 30, 2017. The calculated tax deferred benefit at September 30, 2017 and 2016 is based on the current Federal statutory income tax rate of 35% applied to the loss before provision for income taxes. The tax years open for Internal Revenue Service review are fiscal years ended September 30, 2012 to 2017.
The following table accounts for the differences between the actual income tax benefit and amounts computed for the fiscal years ended September 30, 2017 or 2016:
| Years Ended September 30, | ||||||||
| 2017 | 2016 | |||||||
| Tax benefit at the federal statutory rate | $ | 990,951 | $ | 984,773 | ||||
| State tax benefit | 197,341 | 196,110 | ||||||
| Cumulative effect of true up | 4,623 | 42,041 | ||||||
| Expiration of state operating losses | (110,411 | ) | (138,659 | ) | ||||
| Increase in valuation allowance | (1,082,504 | ) | (1,084,265 | ) | ||||
| Income tax expense | $ | — | $ | — | ||||
The components of the deferred tax asset and deferred tax liability at September 30, 2017 or 2016 are as follows:
| Years Ended September 30, | ||||||||
| 2017 | 2016 | |||||||
| Deferred tax assets - NOLS and other | $ | 10,818,000 | $ | 9,735,496 | ||||
| Valuation allowance | (10,818,000 | ) | (9,735,496 | ) | ||||
| Net deferred tax asset after valuation allowance | $ | — | $ | — | ||||
A valuation allowance has been provided to reduce the net deferred tax asset, as management determined that it is more likely than not that the deferred tax assets will not be realized.
At September 30, 2017, the Company has net operating loss carry forwards for financial statement purposes for Federal income tax approximating $28,680,000. These losses expire in varying amounts between September 30, 2022 and September 30, 2037.
At September 30, 2017, the Company has net operating loss carry forwards for financial statement purposes for State income tax approximating $11,180,000. These losses expire in varying years through September 30, 2037.