The Company’s income tax expense differs from the “expected” tax expense for federal income tax purpose by applying the Federal rate of 35% as follows:
| Year Ended December 31, | ||||||||
| 2016 | 2015 | |||||||
| Expected income tax (benefit) expense at the statutory rate of 35% | $ | (126,215 | ) | $ | (16,786 | ) | ||
| Tax effect of expenses that are not deductible for income tax purposes (net of other amounts deductible for tax purposes) | 114,128 | – | ||||||
| Change in valuation allowance | (12,087 | ) | (16,786 | ) | ||||
| Provision for income taxes | $ | – | $ | – | ||||
The components of deferred income taxes are as follows:
| December 31, | ||||||||
| 2016 | 2015 | |||||||
| Deferred income tax asset: | ||||||||
| Net operating loss carryforwards | $ | 2,743,373 | $ | 2,731,286 | ||||
| Valuation allowance | (2,743,373 | ) | (2,731,286 | ) | ||||
| Deferred income taxes | $ | – | $ | – | ||||
As of December 31, 2016, the Company has a net operating loss carry forward of approximately $2,743,373 available to offset future taxable income, which will begin to expire in 2020. The utilization of these NOLs may become subject to limitations based on past and future changes in ownership of the Company pursuant to Internal Revenue Code Section 382.
Tax returns for the years ended December 31, 2016, 2015 and 2014 are subject to examination by the United States tax authority.