NOTE 10 – INCOME TAXES

The Company recognizes deferred income tax liabilities and assets for the expected future tax consequences of events that have been recognized in the financial statements or tax returns. Under this method, deferred tax liabilities and assets are determined based on the differences between the financial statement carrying amounts and the tax basis of assets and liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial statement and income tax purposes under enacted tax laws and rates.

The tax effects of temporary differences that give rise to deferred tax assets are presented below:

Components of the Company's deferred tax liabilities and assets are as follows:

The income tax provision (benefit) consists of the following:

As of December 31, 2016, the Company had net operating loss carry forwards of approximately $14,857,426 which are being carried forward for subsequent years. Such net operating loss carry forwards expire as follows:

The Company's federal and state income tax returns for the tax years 2013 and forward remain subject to examination.