NOTE 9. INCOME TAXES

We have no current or deferred provision for income taxes for the years ended December 31, 2020 or 2019, because we have net operating loss carryforwards generated from recurring net losses offset by a full valuation allowance as described below.

Deferred tax assets consist of the following at December 31, 2020 and 2019:

	2020			2019

Net operating loss carryforwards	$	2,441,191		$	2,388,540
Allowance for doubtful accounts		122,903			113,101
Less: valuation allowance		(2,564,094	)		(2,501,641	)

	$	-		$	-

Due to uncertainties surrounding our ability to generate future taxable income to realize these assets, a full valuation has been established to offset the net deferred income tax asset. Based on management’s assessment, utilizing an effective combined tax rate for federal and state taxes of approximately 21%, we have determined that it is not currently more likely than not that we will realize our deferred income tax assets of approximately $2,564,000 and $2,502,000 attributable predominantly to the future utilization of the approximate $11,605,000 and $11,374,000 in eligible net operating loss carryforwards, and the allowance for doubtful accounts, as of December 31, 2020 and 2019, respectively. We will continue to review this valuation allowance and make adjustments as appropriate. The net operating loss carryforwards will begin to expire in varying amounts from year 2021 to 2039, with those net operating losses generated during the year ended December 31, 2020 set to never expire based on the provisions of the Tax Reform Act.

Current income tax laws limit the amount of loss available to be offset against future taxable income when a substantial change in ownership occurs. Therefore, amounts available to offset future taxable income may be limited under Section 382 of the Internal Revenue Code.

Following is a reconciliation of the (provision) benefit for federal income taxes as reported in the accompanying consolidated statements of operations, to the expected amount at the 21% federal statutory rate:

	2020						2019
				Percentage						Percentage
				of Pre-Tax						of Pre-Tax
	Amount			Income			Amount			Income

Benefit for income tax at federal statutory rate	$	62,453			21.0	%	$	338,639			21.0	%
Change in available NOLs		-			-	%		(97,775	)		(6.1	%)
Change in valuation allowance		(62,453	)		(21.0	%)		(270,713	)		(16.8	%)
Other					-	%		29,849			1.9	%

Total	$	-			-	%	$	-			-	%