NOTE 11 – INCOME TAXES
A reconciliation of the differences between the effective income tax rates and the statutory federal tax rates for the years ended December 31, 2016 and 2015 are as follows:
|
Year ended December 31, 2016 |
Year ended December 31, 2015 |
|||||||||||||||
| Tax benefit at U.S. statutory rate | $ | 470,466 | 34 | % | $ | 235,276 | 34 | % | ||||||||
| State taxes, net of federal benefit | 55,349 | 4 | 27,679 | 4 | ||||||||||||
| Change in valuation allowance | (525,818 | ) | (38 | ) | (262,955 | ) | (38 | ) | ||||||||
| - | - | - | ||||||||||||||
The tax effect of temporary differences that give rise to significant portions of the deferred tax assets and liabilities at December 31, 2016 and December 31, 2015 consisted of the following:
| Deferred Tax Assets | December 31, 2016 | December 31, 2015 | ||||||
| Net Operating Loss Carry-forward | $ | 10,577,607 | $ | 9,924,492 | ||||
| Deferred Tax Liabilities – Accrued Officers’ Salaries | (900,306 | ) | (795,805 | ) | ||||
| Net Deferred Tax Assets | 9,677,301 | 9,128,687 | ||||||
| Valuation Allowance | (9,677,301 | ) | (9,128,687 | ) | ||||
| Total Net Deferred Tax Assets | $ | - | $ | - | ||||
As of December 31, 2016, the Company had a net operating loss carry forward for income tax reporting purposes of approximately $22.8 million that may be offset against future taxable income through 2031. Current tax laws limit the amount of loss available to be offset against future taxable income when a substantial change in ownership occurs. Therefore, the amount available to offset future taxable income may be limited. No tax asset has been reported in the financial statements because the Company believes there is a 50% or greater chance the carry forwards will expire unused. Accordingly, the potential tax benefits of the loss carry forwards are offset by a valuation allowance of the same amount.