Note 11 - Income Taxes

3 Months Ended

Mar. 31, 2017

Notes

Note 11 - Income Taxes

NOTE 11 – Income Taxes

No provisions for income taxes were recorded for the periods presented since the Company incurred net losses in those periods.

The provisions for (benefits from) income taxes differ from the amounts determined by applying the U.S. Federal income tax rate of 35% to pretax income (loss) as follows:

	Three Months Ended March 31,
	2017	2016
Expected income tax (benefit) at 35%	$          8,435	$      (50,614)
Non-deductible stock-based compensation	3,850	10,500
Non-deductible amortization of debt discounts	30,706	-
Non-taxable (income) from derivative liability	(68,838)	-
Increase in deferred income tax assets
valuation allowance	25,847	40,114
Provision for (benefit from) income taxes	$                 -	$                  -

Deferred income tax assets consist of:

	March 31,  2017	December 31, 2016
Net operating loss carryforward	1,246,326	1,220,479
Valuation allowance	(1,246,326)	(1,220,479)
Net	$                     -	$                     -

Based on management's present assessment, the Company has not yet determined it to be more likely than not that a deferred income tax asset of $1,246,326 attributable to the future utilization of the $3,550,353 net operating loss carryforward as of March 31, 2017 will be realized. Accordingly, the Company has maintained a 100% allowance against the deferred income tax asset in the consolidated financial statements at March 31, 2017. The Company will continue to review this valuation allowance and make adjustments as appropriate. The net operating loss carryforward expires in years 2025, 2026, 2027, 2028, 2029, 2030, 2031, 2032, 2033, 2034, 2035, 2036, and 2037 in the amount of $1,369, $518,390, $594,905, $686,775, $159,141, $151,874, $135,096, $166,911, $311,890, $25,511, $338,345, $386,297, and $73,849, respectively.

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

The Company's U.S. Federal and state income tax returns prior to 2013 are closed and management continually evaluates expiring statutes of limitations, audits, proposed settlements, changes in tax law and new authoritative rulings. The statute of limitations on the 2012 tax year returns expired in March 2016.

The Company recognizes interest and penalties associated with uncertain tax positions as part of the income tax provision and would include accrued interest and penalties with the related tax liability in the consolidated balance sheets. There were no interest or penalties paid during 2017 and 2016.