Entity information:
NOTE
4
- Federal Income Taxes
 
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax liabilities and assets are as follows:
 
 
 
December 31,
 
 
 
2016
 
 
2015
 
Deferred tax liabilities:
 
 
 
 
 
 
 
 
Policy acquisition costs
   $
2,427,869
    $
2,675,908
 
Net unrealized gain on available-for-sale securities
    
5,564,461
     
3,242,210
 
Due premiums
    
922,868
     
957,825
 
Other
    
768,852
     
695,201
 
Total deferred tax liabilities
    
9,684,050
     
7,571,144
 
                 
Deferred tax assets:
 
 
 
 
 
 
 
 
Benefit reserves, net of reinsurance
    
2,626,693
     
3,137,466
 
Other policyholder funds
    
337,333
     
363,106
 
AMT credit carryforwards
    
656,087
     
565,828
 
Accrued pension liability
    
2,047,230
     
2,065,628
 
Deferred revenue on reinsurance ceded
    
486,760
     
-
 
Other-than-temporary impairments
    
40,211
     
-
 
Other
    
232,793
     
333,340
 
Total deferred tax assets
    
6,427,107
     
6,465,368
 
Net deferred tax liabilities
   $
3,256,943
    $
1,105,776
 
 
 
The Company periodically reviews its gross deferred tax assets for recoverability. At
December
31,
2016
and
2015,
the Company is able to demonstrate that the benefit of its gross deferred tax assets is fully recoverable.
 
The reconciliation of income tax attributable to operations computed at the federal statutory tax rate to income tax expense is as follows:
 
 
 
Year Ended December 31,
 
 
 
2016
 
 
2015
 
                 
Statutory federal income tax rate
    
34.0
%
    
34.0
%
Small life insurance company deduction
    
(17.2
 )    
(19.2
 )
Dividends-received deduction
    
(0.9
 )    
(2.7
 )
Defined contribution plan dividend
    
(0.7
 )    
(2.3
 )
Nondeductible COLI expense
    
(5.2
 )    
(16.3
 )
Nontaxable COLI life insurance proceeds
    
-
     
(7.7
 )
Nondeductible travel & meals expense
    
0.6
     
2.5
 
True-up of provision to actual
    
0.1
     
1.7
 
Other
    
0.4
     
(4.7
 )
                 
Effective income tax rate
    
11.1
%
    
(14.7
)
%
 
We file U.S. federal income tax returns and income tax returns in various state jurisdictions. Our
2013
through
2016
U.S. federal tax years remain subject to income tax examination by tax authorities. We have
no
known uncertain tax benefits within our provision for income taxes. In addition, we do
not
believe the Company will be subject to any penalties or interest relative to any open tax years and, therefore, have not accrued any such amounts. However, should such a circumstance arise, it is our policy to classify any interest and penalties (if applicable) as income tax expense in the consolidated financial statements.