Income Taxes

3 Months Ended

Dec. 31, 2019

Income Tax Disclosure [Abstract]

Income Taxes

Note 6. Income Taxes

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets at December 31, 2019 and September 30, 2019 are as follows:

	December 31, 2019			September 30, 2019
Deferred tax assets:
Net operating loss carryforwards	$	158,477		$	157,667
Total deferred tax assets		158,477			157,667
Less: valuation allowance		(158,477	)		(157,667	)
Net deferred tax asset	$	—		$	—

The net increase in the valuation allowance for deferred tax assets was $810 for the three months ended December 31, 2019. The Company evaluates its valuation allowance on an annual basis based on projected future operations. When circumstances change and this causes a change in management’s judgment about the realizability of deferred tax assets, the impact of the change on the valuation allowance is reflected in current operations.

For federal income tax purposes, the Company has net U.S. operating loss carry forwards at December 31, 2019 available to offset future federal taxable income, if any, of $755,900.  Accordingly, there is no current tax expense for the three months ended December 31, 2019 and 2018.

The utilization of the tax net operating loss carry forwards may be limited due to ownership changes that have occurred as a result of sales of common stock.

The effects of state income taxes were insignificant for the three months ended December 31, 2019 and 2018.

The following is a reconciliation between expected income tax benefit and actual, using the applicable statutory income tax rate of 21% for the three months ended December 31, 2019 and 2018, respectively:

	Three months Ended
	December 31,
	2019			2018
Income tax benefit at statutory rate	$	810		$	1,279
Change in valuation allowance		(810	)		(1,279	)
	$	—		$	—

The fiscal years 2012 through 2019 remain open to examination by federal authorities and other jurisdictions in which the Company operates.

On December 22, 2017, the Tax Cuts and Jobs Act was enacted. This law substantially amended the Internal Revenue Code, including reducing the U.S. corporate tax rates. Upon enactment, the Company’s deferred tax asset and related valuation allowance decreased by $110,223 to $150,334. As the deferred tax asset is fully allowed for, this change in rates had no impact on the Company’s financial position or results of operations.