The Company accounts for income taxes under the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") No. 740, Income Taxes ("ASC 740"). Under ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under ASC 740, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.
| December 31, | ||||||||
| 2016 | 2015 | |||||||
| Income tax provision (benefit) at statutory rate | $ | (182,000 | ) | $ | (880,000 | ) | ||
| Change in valuation allowance | 182,000 | 880,000 | ||||||
| Income Tax Expense | $ | - | $ | - | ||||
| Net deferred tax assets and liabilities were comprised of the following: | ||||||||
| Net Operating Losses | $ | 3,884,000 | $ | 3,702,000 | ||||
| Valuation allowance | (3,884,000 | ) | (3,702,000 | ) | ||||
| Deferred tax asset, net | $ | - | $ | - | ||||
As of December 31, 2016, the Company has taxable net loss carryovers of approximately $11.4 million. The change in the valuation allowance for the years ended December 31, 2016 was $182,000. Under the Internal Revenue Code of 1986, as amended, these losses can be carried forward twenty years. Net operating losses will expire through 2036.
The Company did not take any uncertain tax positions and had no adjustments to its income tax liabilities or benefits pursuant to the provisions of Section 740-10-25 for the years ended December 31, 2016 or 2015. The Company's federal income tax returns for the years ended December 31, 2012 through December 31, 2016 remain subject to examination by the Internal Revenue Service as of December 31, 2016.