Income Tax Provision

12 Months Ended

Dec. 31, 2012

Note 7 – Income Tax Provision

Deferred Tax Assets

At December 31, 2012, the Company has available for federal income tax purposes a net operating loss (“NOL”) carry-forwards of approximately $1,549,433 that may be used to offset future taxable income through the fiscal year ending December 31, 2032. No tax benefit has been reported with respect to these net operating loss carry-forwards in the accompanying consolidated financial statements since the Company believes that the realization of its net deferred tax asset of approximately $526,807 was not considered more likely than not and accordingly, the potential tax benefits of the net loss carry-forwards are fully offset by a full valuation allowance.

Deferred tax assets consist primarily of the tax effect of NOL carry-forwards. The Company has provided a full valuation allowance on the deferred tax assets because of the uncertainty regarding its realizability. The valuation allowance increased by approximately $3,207 and $13,600 for the year ended December 31, 2012 and 2011, respectively.

Components of deferred tax assets are as follows:

	December 31, 2012		December 31, 2011
Net deferred tax assets – Non-current:

Expected income tax benefit from NOL carry-forwards	$	1,549,433	$	1,540,000
Less valuation allowance		(1,549,433)		(1,540,000)
Deferred tax assets, net of valuation allowance	$	-	$	-

Income Tax Provision in the Consolidated Statements of Operations

A reconciliation of the federal statutory income tax rate and the effective income tax rate as a percentage of income before income taxes is as follows:

	For the Year Ended December 31, 2012			For the Year Ended December 31, 2011

Federal statutory income tax rate		34.0	%		34.0	%

Change in valuation allowance on net operating loss carry-forwards		(34.0)	%		(34.0)	%

Effective income tax rate		0.0	%		0.0	%

Tax Returns Remaining subject to IRS Audits

The Company has not yet filed its corporation income tax return since its inception. In other words, the Company's corporation income tax returns for the all reporting periods from inception will remain subject to audit under the statute of limitations by the Internal Revenue Service and the State of New York for a period of three (3) years from the date they are filed.