Entity information:

NOTE 5 - INCOME TAXES

 

The actual income tax provision for continuing operations is as follows as of September 30, 2017 and 2016, respectively:

 

 

   9/30/2017   9/30/2016 
Expected provision (based on statutory rate of 15%)  $(854,152)  $(776,387)
Effect of:          
Increase (decrease) in valuation allowance   732,562    740,576 
State minimum tax, net of federal benefit        — 
Non-deductible expense   121,590    29,555 
Net operating loss adjustment   —    — 
Rate Change   —    — 
Other, net   —    6,256 
Total actual provision  $—   $— 

 

The Company has not made any adjustments to deferred tax assets or liabilities. The Company did not identify any material uncertain tax positions of the Company on returns that have been filed or that will be filed. The Company has not had operations and is carrying a large Net Operating Loss as disclosed below. Since this Net Operating Loss will not produce a tax benefit for several years, even if examined by taxing authorities and disallowed entirely, there would be no effect on the financial statements.

 

The Company’s policy is to recognize potential interest and penalties accrued related to unrecognized tax benefits as a component of income tax expense (benefit). For the years ended September 30, 2017 and 2016, the Company did not recognize any interest or penalties, nor did we have any interest or penalties accrued as of September 30, 2017 and 2016 relating to unrecognized benefits.

 

The provision for income taxes consists of the following as of September 30, 2017 and 2016:   

 

    9/30/2017

    

9/30/2016

 
FEDERAL          
Current  $—   $— 
Deferred   —    — 
STATE          
    Current   —    — 
Deferred   —    — 
TOTAL PROVISION  $—   $— 

 

Deferred income tax assets and liabilities at September 30, 2017 and 2016 consist of the following temporary differences:

 

    9/30/2017    9/30/2016 
DEFERRED TAX ASSETS        
Current  $—   $— 
Noncurrent          
Net operating losses   5,611,276    3,965,535 
Exploration costs   (931,289)   (809,244)
Gain recognized on sale of working interest   691,336    1,414,901 
Stock based compensation   138,278    74,709 
Accrued interest and expenses not paid   246,360    320,147 
Allowance for doubtful receivable   —    19,204 
Differences in book/tax depreciation   7,215    5,362 
Total noncurrent   5,723,176   $4,990,614 
Valuation Allowance   (5,723,176)   (4,990,614)
NET DEFERRED TAX ASSET   —    — 
DEFERRED TAX LIABILITIES   —    — 
NET DEFERRED TAXES  $—   $— 

 

The Company’s valuation allowance has increased $ 732,562 during the year ended September 30, 2017 and $740,576 during the year ended September 30, 2016.

 

The following is a summary of federal net operating loss carryforwards and their expiration dates:

 

Amount   Expiration
$ 3,203   9/30/2024
  7,695   9/30/2025
  18,447   9/30/2026
  16,876   9/30/2027
  17,986   9/30/2028
  8,596   9/30/2029
  7,713   9/30/2030
  64,097   9/30/2031
  513,914   9/30/2032
  7,155,229   9/30/2033
  11,567,666   9/30/2034
  1,203,016   9/30/2035
  6,777,040   9/30/2036
  10,047,031   9/30/2037
$ 37,408,509   Total

 

The tax years ended September 30, 2014 through 2017 are open for examination for federal income tax purposes and by other major taxing jurisdictions to which we are subject.