NOTE 11 - INCOME TAXES
The Company has experienced losses during most years since its inception. As a result, it has incurred no Federal income tax. The Internal Revenue Code allows net operating losses (NOL’s) to be carried forward and applied against future profits for a period of twenty years; an NOL of $29,776,217 had accumulated at December 31, 2016 on U.S. operations and has been carried forward. The potential tax benefit of the NOL’s has been recognized on the books of the Company, and is offset by a valuation allowance.
Under current accounting guidance, recognition of deferred tax assets is permitted unless it is more likely than not that the assets will not be realized. The Company has recorded deferred tax assets using statutory rates, as presented below. The valuation reserve increased by $5,211,834 during the year ended December 31, 2016.
31-Dec-16 |
| 31-Dec-15 | |
|
|
| |
Opening Balance | (24,564,383) |
| (21,357,211) |
Current | (5,211,834) |
| (3,207,172) |
Year end NOL | (29,776,217) |
| (24,564,383) |
|
|
|
|
Total |
| Total | |
Deferred Tax Assets | (10,123,914) |
| (8,351,890) |
Realization Allowance | 10,123,914 |
| 8,351,890 |
Balance Recognized | $ - |
| $ - |
The effective tax rate is as follows:
Statutory Federal Rate | 34% |
Effect of Valuation Allowance | (34%) |
Effective Rate | 0% |